Crédit Agricole Corporate and Investment Bank Deutschland, Niederlassung
einer französischen
Société Anonyme
Frankfurt am Main
Jahresabschluss zum Geschäftsjahr vom 01.01.2018 bis zum 31.12.2018
Crédit Agricole
CIB Deutschland
Registration Document
2018
CONTENTS
1. PRESENTATION OF CRÉDIT AGRICOLE CIB
1. Company History
2. Highlights 2018
3. Crédit Agricole CIB's business lines
2. ECONOMIC, SOCIAL AND ENVIRONMENTAL INFORMATION
1. Our CSR strategy: progressive actions driven by employees' involvement
2. Promoting an ethical culture
3. Incorporating climate change priorities
4. Helping our clients to meet their social, environmental and solidarity related
challenges
5. Developing people and the social ecosystem
6. Promoting the economic, cultural and social development of the host country
7. Limiting our direct environmental footprint
3. CORPORATE GOVERNANCE
1. Board of Directors report on corporate governance
2. Composition of the Executive Committee
4. 2018 BUSINESS REVIEW AND FINANCIAL INFORMATION
1. Crédit Agricole CIB Group's business review and financial information
2. Information on the financial statements of Crédit Agricole CIB (S.A.)
5. RISKS AND PILLAR 3
1. Risk factors
2. Risk management
3. Basel III Pillar 3 disclosures
6. CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018
1. General framework
2. Consolidated financial statements
3. Effects of the application of IFRS 9 at 1 January 2018
4. Notes to the consolidated financial statements
5. Statutory auditors' report on the consolidated financial statements for the
year
ended 31 December 2018
7. PARENT-COMPANY FINANCIAL STATEMENTS AT 31 DECEMBER 2018
1. Crédit Agricole CIB (S.A.) financial statements
2. Notes to the parent-company financial statements
3. Statutory Auditors' report on the financial statements Year ended 31 December
2018
8. GENERAL INFORMATION
1. Information about the Company
2. Statutory auditors' report on related party agreements and commitments Annual
General
Meeting held to approve the financial statements for the year ended 31 December 2018
3. Person responsible for the Registration document and for auditing the accounts
responsibility statement
4. Statutory auditors
5. Cross-reference table
9. GLOSSARY
A WHOLE BANK JUST
FOR YOU
As a trusted partner to its customers, Crédit Agricole has remained true to its
enduring
values of customer focus, accountability and solidarity for 125 years.
Crédit Agricole is committed to establishing long-term relationships with all its
customers to support their projects, prepare for life's uncertainties and protect
their interests.
It serves all customers, from low-income families to high net worth individuals,
from
local merchants to farmers and multinationals, committing to transparency, loyalty
and straightforward information.
Its customer-focused universal banking model underpins an ambitious Customer Project
focused on building comprehensive and lasting relationships. The synergy between Crédit
Agricole's different businesses provides each customer with a diverse pool of expertise
and a distribution model that delivers a 100% human, 100% digital banking experience.
The Group aims for excellence in customer relations to the benefit of all, with:
| ― |
day-to-day banking, lending and savings products, insurance,
|
| ― |
asset management, wealth management, leasing, factoring,
|
| ― |
corporate and investment banking, asset servicing,
|
| ― |
payment services and real estate.
|
Crédit Agricole's Corporate Social Responsibility policy lies at the heart of its
cooperative and mutual identity, and its ambition.
It actively addresses environmental and social issues by supporting progress and
change.
Systematic integration of climate risk into its financing and investment strategies
(for asset management and insurance), as well as the bank's increasing involvement
in renewable energy projects and its support for customers transitioning to a low-carbon
economy illustrate its commitment.
This policy is embodied by the engagement of its 141,000 employees.
| #1 Bancassurer in Europe Provider of financing to the
French economy European asset
manager
|
51 M customers |
47 countries |
141 000 employees |
GROUP ORGANISATION
More than 10 million mutual shareholders underpin Crédit Agricole's cooperative
organisational
structure. They own the capital of the 2,432 Local Banks in the form of mutual shares
and they elect their representatives each year. More than 30,000 directors work in
their best interests.
The Local Banks own the majority of the 39 Regional Banks' share capital.
The Regional Banks are cooperative regional banks that offer their customers a
comprehensive
range of products and services. Their sounding board is the Fédération Nationale du
Crédit Agricole, where the Group's strategic vision and policies are discussed.
The Regional Banks together own, via SAS Rue La Boétie, the majority (56.3%) of
the
share capital of Crédit Agricole S.A. Working with its specialist subsidiaries, Crédit
Agricole S.A. coordinates the various business lines' strategies in France and abroad.
Other specialised subsidiaries: Crédit Agricole Capital, Investissement & Finance,
(Idia, Sodica), Uni-Médias
OUR BUSINESS MODEL: TO
BE YOUR TRUSTED PARTNER
CRÉDIT AGRICOLE
CORPORATE & INVESTMENT BANK A sound, responsible, committed bank to serve clients
of the Crédit Agricole group
(financial institutions, corporates, mid-caps) by relying on its strong expertise
in corporate, market, and investment banking and wealth management as well as its
extensive client coverage and moderate risk policy.
Crédit Agricole
S.A. at 31 December 2018 (% interest) (1)
Financial transactions between Crédit Agricole S.A. and its subsidiaries are subjected
to reglemented agreement, as the case may be, that are mentioned in the statutory
auditors' special report.
Internal mechanisms of Crédit Agricole Group (in particular between Crédit Agricole
S.A. and the Regional Banks) are detailed in the registration document of Crédit Agricole
S.A., in the paragraph "Internal financing mechanisms", in introduction of the consolidated
financial statements.
(1)
Direct % interest held by Crédit Agricole S.A. and its subsidiaries.
(2)
Owned by Crédit Agricole Group.
MESSAGE from
the Chairman and the Chief Executive Officer
Crédit Agricole Group's results for 2018 are very satisfactory and demonstrate
the
strength of our universal banking model. All business lines contributed to these results,
in spite of a difficult economic environment in the markets. The Large Clients division
accounts for nearly 35% of Crédit Agricole S.A.'s net result.
Through its daily commitment, in France and abroad, to serve large and medium-size
companies and financial institutions, Crédit Agricole CIB is actively involved in
Crédit Agricole's universal approach to financing the economy. Being a universal bank
also means supporting our clients to provide answers to the great challenges of our
times together. Among these, climate change is without a doubt one of the main challenges.
Thanks to its long-standing experience, Crédit Agricole CIB has become a global leader
in financing large environmental infrastructures throughout the world and issuing
green bonds. Its pioneering position in this area also puts Crédit Agricole CIB at
the heart of international climate discussions and allows it to introduce standardization
initiatives and develop best practices.
For the next medium-term plan which will be announced on June 6th, we would like
to
amplify our Client Project by aiming for excellence in our relationships. We will
place particular emphasis on helping our clients with their environmental issues by
offering practical and suitable solutions for the energy transition. Finally, we want
to develop and improve the technical and relationship skills of our employees who
are in daily contact with our clients.
I know that Crédit Agricole CIB's expertise will be essential for the whole Group,
in particular in the field of climate finance. I also know that the mobilization of
all our members of staff is a strategic asset that will allow us to provide practical
answers to all these challenges together.
PHILIPPE BRASSAC
Chairman of Crédit Agricole CIB's Board of Directors
Crédit Agricole S.A. Chief Executive Officer
In 2018, Crédit Agricole CIB achieved satisfactory results and maintained its positions
in a challenging market. Commercial momentum was strong in most of its business lines,
particularly in structured finance and commercial banking. Market activities experienced
a particularly unfavourable environment in the fourth quarter and investment banking
was adversely affected by a lacklustre market. Costs remained under control and this
year's results benefited from a lower cost of risk with reversals of provisions recorded
over three consecutive quarters. Crédit Agricole CIB's net income group share reached
EUR 1.5 billion, a 7% increase compared to the previous year.
In 2018, we received many awards for our leading positions in project, transport,
infrastructure, export and climate finance. These various awards confirm Crédit Agricole
CIB's commercial prowess and are the result of a coordinated commercial approach.
Our business model is relevant: it is long-term and strong and makes us more resilient
against market volatility. It is built around key guidelines that steer our daily
actions: supporting our clients over the long term, financing the real economy, affirming
clear values in terms of social and environmental responsibility and finally, maintaining
a moderate risk profile.
In the coming years, we plan to stay on this course while adapting to the changes
in our businesses triggered by new regulatory constraints that will reduce banks'
profitability and by the digitalization of products and services that are already
transforming our industry. To meet these major challenges, we will continue to focus
on our clients, supporting them as best we can with their financing and investment
needs. We will also adapt our organization and our product offering in the changing
environment, while controlling our cost base and thus our profitability.
Going forward we will drive agility with determination and make the necessary adjustments
required to make Crédit Agricole CIB the trusted partner of the corporate and financial
institution clients of the Crédit Agricole group throughout the world. Every day our
teams make the commitment to fulfil this mission.
JACQUES
RIPOLL, Crédit Agricole CIB Chief Executive Officer
1. PRESENTATION
OF CRÉDIT AGRICOLE CIB
Income statement
highlights
|
|
31.12.2018 |
31.12.2017 |
31.12.2016 |
| € million |
Crédit Agricole CIB |
Underlying CIB(1) |
Crédit Agricole CIB |
Underlying CIB(1) |
Crédit Agricole CIB |
Underlying CIB(1) |
| Net banking income |
5,276 |
4,409 |
4,999 |
4,587 |
4,936 |
4,427 |
| Gross operating income |
1,955 |
1,799 |
1,814 |
2,027 |
1,856 |
1,902 |
| Net income Group Share (2) |
1,479 |
1,372 |
1,156 |
1,284 |
1,182 |
1,226 |
(1)
Restated for loan hedges and impact of DVA running in NBI and tax in 2018, 2017 and
2016, restated for gains on the disposal of BSF as a proportion of equity method (EM)
net income in 2017 and restated for execptional tax in 2017.
(2)
Including legal provisions in cost of risk in 2017 and 2016.
Balance sheet
| € billion |
31.12.2018 |
31.12.2017 |
31.12.2016 |
| Total assets |
511.7 |
488.6 |
524.3 |
| Gross loans to customers |
136.6 |
138.1 |
139.0 |
| Assets under management (in Wealth Management) |
122.8 |
118.3 |
110.0 |
Financial structure
| € billion |
31.12.2018 |
31.12.2017 |
31.12.2016 |
| Shareholder's (including income) |
20.3 |
18.9 |
19.5 |
| Tier one capital |
19 |
18.2 |
19.2 |
| Basel III risk-weighted assets |
118.9 |
112.0 |
123.2 |
Solvency ratio
Ratings
|
|
Short-term |
Long-term |
Last rating action |
| Moody's |
Prime-1 |
A1 [positive outlook] |
5 July 2018 |
| Standard & Poor's |
A-1 |
A+ [Stable outlook] |
19 October 2018 |
| Fitch Ratings |
F1 |
A+ [Stable outlook] |
4 December 2018 |
Distribution of
net banking income
BREAKDOWN OF REVENUES
BY BUSINESS LINES (1)
|
|
31.12.2017 |
31.12.2016 |
| Financing activities |
43% |
43% |
| Capital markets and investment banking |
43% |
42% |
| Wealth management |
14% |
14% |
(1)
Restated for loan hedges and impact of DVA running in NBI and tax in 2018, 2017 and
2016, restated for gains on the disposal of BSF as a proportion of equity method (EM)
net income in 2017 and restated for execptional tax in 2017.
BREAKDOWN OF NET
BANKING INCOME BY GEOGRAPHICAL AREA
|
|
31.12.2017 |
31.12.2016 |
| France |
36% |
31% |
| Europe |
29% |
29% |
| International |
35% |
41% |
Headcount at end
of period
FULL-TIME EQUIVALENT
|
|
2017(1) |
2016(1) |
| France |
4,499 |
4,298 |
| International |
6,202 |
5,869 |
| Total |
10,701 |
10,167 |
(1)
Wealth management contributes to 3 219 in 2018, 3 014 in 2017 et 2 772 in 2016.
1. COMPANY HISTORY
| 1863 |
Creation of Crédit Lyonnais |
| 1875 |
Creation of Banque de l'Indochine |
| 1894 |
Creation of the first "Sociétés de Crédit Agricole",
later entitled Caisses Locales
("Local Banks")
|
| 1920 |
Creation of Office National de Crédit Agricole, that
became the Caisse Nationale de
Crédit Agricole (CNCA) in 1926
|
| 1945 |
Nationalisation of Crédit Lyonnais Creation of Banque
de Suez |
| 1975 |
Merger of Banque de Suez and Union des Mines with Banque
d'Indochine to form the Banque
Indosuez
|
| 1988 |
CNCA becomes a public limited company owned by Regional
Banks and employees ("Mutualisation") |
| 1996 |
Acquisition of Banque Indosuez by Crédit Agricole one
of the world's top 5 banking
groups, to create international investment banking arm
|
| 1997 |
The Caisse nationale de Crédit Agricole consolidates
within Crédit Agricole Indosuez
its existing international, capital markets and corporate banking activities
|
| 1999 |
Privatisation of Crédit Lyonnais |
| 2001 |
CNCA changes its name to Crédit Agricole S.A. and goes
public on 14 December 2001 |
| 2003 |
Successful mixed takeover bid on Crédit Lyonnais by Crédit
Agricole S.A. |
| 2004 |
Creation of Calyon, the new brand and corporate name
of the Crédit Agricole Group's
financing and investment banking business, through a partial transfer from Crédit
Lyonnais to Crédit Agricole Indosuez
|
| 06-febr-10 |
Calyon changes its name and becomes Crédit Agricole Corporate
and Investment Bank |
2. HIGHLIGHTS
2018
2018 was characterised in particular by the rise in political risks which have
weighed
on economic prospects: trade war between the United States and China, uncertainties
on the outcome of Brexit, risk of budgetary slippage in Italy. In France, the social
climate became more tense in the last quarter (demonstrations by "gilets jaunes" affecting
the country's growth, which will be revised down from 0.4% to 0.2%). The financial
markets had a very volatile year with negative performance on all asset classes (bonds
or equities, conservative funds, diversified funds etc.) notably due to the rise in
rates in the United States and the reduction in the size of central banks' balance
sheets.
In this context, the Bank reported a 4.3% (1) fall in revenues year
on year, punished in particular by its capital markets and
investment banking activities, which suffered from adverse market conditions and continuing
conservative risk profiles. Financing activities continue to grow with a good level
of activity in all businesses.
Regarding the financing activities, Crédit Agricole CIB confirmed its position
as
a leader in aircraft financing (2) and moved from 7 th to 4
th place worldwide in project financing (3) .
In capital markets, the Bank is positioned top of the global rankings on supranational
issues and gained 2.4 points of market share compared with 2017 (4) , carrying
out significant operations, notably for the People's Republic of China.
Regarding investment banking, Crédit Agricole CIB is ranked 5 th in
mergers and acquisitions in France (5) reflecting sustained activity throughout
the year for M&A.
In addition, Crédit Agricole CIB confirmed its position in green financing and
rose
to number 1 worldwide as book-runner on Green Bonds (6) . In 2018, the
bank led over 50 benchmark bond issues, including issues by La Poste,
Prologis, Inter American Development Bank, ICBC and Bank of China. It also managed
the first issue of green bonds by the Kingdom of Belgium, the first issue of social
bonds by a company (Danone), and the first Euro Medium Term Notes (EMTN) programme
for Société du Grand Paris.
In accordance with "Strategic Ambition 2020", Crédit Agricole's medium-term plan,
the Bank has strengthened the Group's growth momentum by implementing a joint project
with CA Italia in order to target Mid-Corporates in Italy and the development of Crédit
Agricole CIB's Client Relationship Management tool in international retail banking.
In addition, one of the initiatives of the Large Customers division regarding the
development of Private Equity funds was successful in 2018. Crédit Agricole CIB also
re-asserted its ambitions in terms of external growth with the acquisition of Banca
Leonardo.
Regarding the long-term improvement of industrial efficiency at the Group level,
the
Bank was the main contributor to various projects: taking over the processes and workforce
of the Bank Services Division (DSB), previously part of Crédit Agricole S.A, and the
IT Services Management (MSI) activity by Global IT.
Crédit Agricole CIB always strives to best meet the expectations of its customers.
International Trade and Transaction Banking services were expanded in order to cover
all customer requirements following the takeover of Correspondent Banking activities.
(1)
Underlying CIB
(2)
Source: Air Finance Journal
(3)
Source: Thomson Financial
(4)
Source: Thomson Financial
(5)
Source: Thomson Financial
(6)
Source: Bloomberg
3. CRÉDIT AGRICOLE
CIB'S BUSINESS LINES
| 3.1 FINANCING ACTIVITIES |
|
| Structured finance |
Commercial Banking |
| ♦ Aircraft and rail financing |
♦ Cash management |
| ♦ Shipping financing |
♦ Transactional commodity finance |
| ♦ Real estate and hotels |
♦ Syndicated loans |
| ♦ ... |
♦ International trade financing |
|
|
♦ ... |
| 3.2 CAPITAL MARKETS AND INVESTMENT
BANKING |
|
|
| Global Markets Divisions |
Treasury division |
Investment Banking |
| ♦ Credit |
♦ Short term liquidity management |
♦ Advisory activities related to stocks and securities
issuance |
|
|
♦ Bank short term refinancing |
♦ Structuring and selling transactions involving equity
derivatives |
| ♦ Interest rate derivates |
|
♦ Activities dedicated to mergers and acquisitions |
| ♦ Structuring and product development |
|
♦ Tailored-made financing transaction |
| ♦ Foreign exchange |
|
|
| ♦ ... |
|
|
3.3 WEALTH MANAGEMENT
3.1 FINANCING
ACTIVITIES
The Financing activities combine Structured Finance and Commercial Banking. The
underlying
net banking income (1) is €2,487 million for 2018 which represents 56.4%
of CIB underlying net banking income
(1) .
Structured finance
At 31 December 2018, Structured Finance business lines' underlying (1)
net banking income is €1,232 million for FY2018, which represents 49.5% of Financing
activities underlying (1) net banking income. The Structured Finance business
(SFI) consists in originating,
structuring and financing major export and investment operations in France and abroad,
often backed with assets as collateral (aircraft, boats, business property, commodities
etc.), along with complex and structured loans.
The Structured Financing business is historically a strong point of Crédit Agricole
CIB with global top 5 rankings in certain products. SFI strives to maintain excellence
in the quality of services delivered and to optimise consumption of RWA and liquidity
whilst improving the rotation of assets and diversifying distribution channels.
ASSET FINANCE
GROUP
♦ Aircraft and
rail financing
Involved for more than thirty-five years in the aeronautics sector, and enjoying
an
excellent reputation in the markets, Crédit Agricole CIB has always preferred long-term
striving to build lasting relationships with major airlines, airports and business
related services to air transport (maintenance, ground services, etc.) to understand
their priorities in terms of activity and funding requirements.
Present for several years in the rail industry in New York and Paris, Crédit Agricole
CIB continues to expand its offering in Europe.
♦ Shipping financing
Crédit Agricole CIB has been financing ships for French and foreign ship-owners
for
thirty years and acquired solid expertise and a worldwide reputation. This business
line supports a modern and diversified fleet of over 1,100 ships to an international
clientele of ship-owners.
♦ Real estate
and hotels
Crédit Agricole CIB's real estate and hotels department operates in 10 countries.
Crédit Agricole CIB provides advice to real estate professionals and to companies
and institutional investors that want to optimise the value of their properties.
ENERGY & INFRASTRUCTURE
GROUP
♦ Natural resources,
infrastructure and power
Crédit Agricole CIB provides financial advice and arranges nonrecourse credit for
new projects or privatisations. The banking and bond financing that Crédit Agricole
CIB arranges involves commercial banks as well as export credit agencies and/or multilateral
organisations.
The project finance business operates in natural resources (oil, gas, petrochemicals,
mines and metal bashing), electricity generation and distribution, environmental services
(water, waste processing) and infrastructure (transport, hospitals, prisons, schools
and public services).
The business operates worldwide, in a dozen of regional excellence centers.
GLOBAL FINANCE
SPONSORS GROUP
♦ Acquisition
finance
The Acquisition finance team is the result of collaboration between Commercial
Banking
and Investment Banking businesses. It offers private equity funds various tailored
services covering all steps of their development (fund-raising, acquisition of target
companies, buying and selling advice, IPOs, interest-rate and foreign-exchange products).
The team operates in Europe and in Asia.
♦ Global Telecom,
Media & Technology
Crédit Agricole CIB advises and finances Telecom, Media & Technology companies
for
over thirty years. The Global TMT sector working together with all the bank's product
teams to assist sector actors in their external growth projects or organic by providing
their know-how on mergers and acquisitions and financing bank, bond or equity.
Commercial Banking
At 31 December 2018, Commercial Banking business line's underlying (1)
net banking income is €1,255 million for FY2018, which represents 50.5% of Financing
activities underlying net banking income (1) .
INTERNATIONAL
TRADE & TRANSACTION BANKING (ITB)
Crédit Agricole CIB offers its clients, importers or exporters, financing and securing
solutions for their international trade operations. The Export & Trade Finance
business
is based on a commercial network of specialists spread across nearly 30 countries.
Commercial Bank in France has products and services that rely on the expertise
of
specialised business lines of Crédit Agricole CIB as well as the capabilities offered
by the networks of Crédit Agricole Group (Regional Banks, LCL) and its specialised
subsidiaries.
More precisely, ITB offers domestic and international cash management, short and
medium
term trade finance, syndicated loans, leasing, factoring, supply chain, international
trade (letters of credit, receipts, pre-financing export, buyer credits, forfaiting,
etc.), domestic and international guarantees, market guarantees, and interest rates
and foreign exchange risk management products.
The Bank also provides transactional commodity finance which offers funding solutions
and secure payments related to short-term flows of commodities and semi-finished products.
Our clients are major international producers and traders operating in the commodity
markets, particularly energy (oil, derivatives, coal and biofuel), metals, soft and
certain agricultural commodities.
CLIENT COVERAGE
& INTERNATIONAL NETWORK (CIN)
The CIN pole provides coverage of large companies in France and abroad, and more
specifically
in France, coverage of midcap companies.
In terms of Islamic finance, Crédit Agricole CIB provides easy access to Sharia
compliant
solutions in many areas with a dedicated team in the Gulf.
The CIN division has a team dedicated to green banking which helps the bond issuing
and financing businesses to structure transactions in compliance with CSR commitments.
Crédit Agricole CIB is a global leader in the green bonds market.
DEBT OPTIMISATION
& DISTRIBUTION (DOD)
Debt Optimisation & Distribution is in charge of the origination, structuring
and
arranging medium and long term credits for corporate clients and financial institutions.
Syndicated loans are an integral part of capital raising for large companies and
financial
institutions.
The DOD business line is a driving force in the distribution of syndicated loans
with
a view to optimising Crédit Agricole CIB's balance sheet.
The DOD business line is the starting point of new initiatives in terms of distribution:
new asset class, new distribution channels including the partnership with CA Group
Regional Banks.
(1)
Restated for loan hedges and debt value adjustment (DVA) impacts for €23 million and
€22 million, respectively.
3.2 CAPITAL MARKETS
AND INVESTMENT BANKING
This business includes capital markets, as well as investment banking and the underlying
(1) net banking income is €1,922 million for 2018, which represents 43.6%
of CIB underlying
(1) net banking income
Global Markets
Division
At 31 December 2018, Global Markets Division business line's underlying net banking
income (1) is €1,427 million, which represents 74.3% of Capital Markets
and Investment Banking
underlying net banking income (1) .
This business line covers all trading activities and the sale of market products
intended
for corporates, financial institutions and major issuers.
Owing to a network of 20 trading floors, including five liquidity centers in London,
Paris, New York, Hong Kong and Tokyo, Crédit Agricole CIB offers its customers strong
positions in Europe, Asia and the Middle East, a targeted presence in the USA, and
additional entry points into local markets.
Global Markets Division (GMD) is organised around:
| ― |
a Global Markets Trading Division, with the following product
lines: Forex exchange
activities, Rates activities (linear and non-linear products) and Credit activities;
|
| ― |
a Global Markets Sales Division (GMS) including structuration
activities and the eBusiness
team;
|
| ― |
debt origination (Debt Capital Markets);
|
| ― |
securitisation;
|
| ― |
a Chief Operating Officer (COO) team Office, including Permanent
Control, Collateral
Management, and Scare Ressources Management.
|
Global Investment Banking (GIB) and GMD put together their expertise and created
the
"Equity Solutions" team in September 2016. The main objectives rely on the extension
of the range of Equity investment products, the fulfillment of the ambitions to develop
"Strategic Equity Transactions" activity of GIB.
Treasury division
At 31 December 2018, Treasury business line's underlying net banking income (1)
is €212 million, which represents 11% of Capital Markets and Investment Banking underlying
net banking income (1) . The Treasury business line hierarchically reports
to the Chief Financial Officer
via Execution Management and functionally to the head of Global Markets division.
In 2018 the Crédit Agricole CIB and Crédit Agricole S.A. Treasury businesses joined
forces to form a pooled team. The Treasury business now manages the liquidity risk
of the Group whilst respecting the regulatory constraints in which the two legal entities
operate.
The Treasury business ensures the sound and prudent daily management of the Bank's
short-term liquidity, in accordance with the methods decided in the Asset & Liability
Management Committees, in accordance with internal and external constraints (short
term liquidity ratios, regulatory ratios, reserves).
The organisation of the Treasury business around 5 liquidity centres worldwide
(Paris,
London, New York, Hong Kong and Tokyo), 17 local Treasury departments and a central
hub for private banking enables the short-term financing requirements of the Bank
and of the recycling of liquidity surpluses to be continually optimised, in particular
by central bank replacement.
This geographical location enables access to wide-ranging and diversified short-term
financing, complementing the long-term refinancing provided by ALM.
The Treasury business also manages a portfolio of high quality liquid assets (HQLA).
The Treasury business is responsible for the Bank's short-term issuance programmes
(New CP / CD / ECP etc.) and also for the process for contributing to the Euribor,
Libor, CNHbor and Hibor indices.
Investment Banking
At 31 December 2018, Investment banking business line's underlying (1)
net banking income is €283 million for FY2018, which represents 14.7% of Capital
Markets and Investment banking underlying net banking income (1) . Investment
banking business involves "all equity and long-term" financing activities
for corporate clients of Crédit Agricole CIB and has four main segments:
PRIMARY EQUITY
CAPITAL MARKETS
The Primary Equity Capital Markets business line is responsible for the advisory
activities
related to stocks and securities issuance giving rights to the share capital.
It is especially in charge of capital increases, secondary offerings as well as
convertible
bonds, exchangeable bonds and other hybrid products issues for the large and mid-cap
primary markets.
STRATEGIC EQUITY
TRANSACTION
Strategic Equity Transaction business is in charge of structuring and selling transactions
involving equity derivatives (Corporate activity and Convertibles) in order to help
corporate clients to manage their equity and long term financing.
This activity covers leveraged employee savings, share buyback programs, equity
financing
and stock options or investment securities hedging.
GLOBAL CORPORATE
FINANCE
This business line gathers the activities dedicated to mergers and acquisitions,
from
strategy advisory services to transaction execution. It assists clients in their development
with, advisory mandates for purchases and disposals, opening up capital to new investors
and restructuring, strategic financial advisory services and advisory services for
privatisations.
STRUCTURED AND
FINANCIAL SOLUTIONS (SFS)
The Structured and Financial Solutions business line offers Crédit Agricole CIB's
large customers tailored solutions with high added value in support of their complex
financing operations. In particular, it makes it possible to find alternative financing
solutions for traditional banking operations and capital market solutions.
SFS also realises receivables' financing, of which the "CICE" tax credit put in
place
by the French government.
(1)
Restated for loan hedges and debt value adjustment (DVA) impacts for for €23 million
and €22 million, respectively.
3.3 WEALTH MANAGEMENT
The Wealth Management, under the worldwide trademark of Indosuez Wealth Management
since January 2016, offers a tailored approach allowing each individual customer to
manage, protect and transfer their assets in a manner which best fits their aspirations.
Our teams offer expert and first class services for the management of both private
and business assets.
Since 2012, Wealth Management has been part of an entirely globalised and cross-functional
organisation. This enables the best combination of the teams' know-how, and use of
their synergies together in order to improve proximity to, and the experience of,
an increasingly international clientele.
Indosuez Wealth management continues its digital transformation, with a view to
consolidating
the quality of its services, strengthening its efficiency and offering its clients
excellence whilst respecting its values.
In France, the partnership which links Indosuez France and the regional banks (Caisses)
is based on complementary approaches, and is a distinct advantage when it comes to
satisfying the evolving expectations of wealthy clients of the Crédit Agricole group.
2. ECONOMIC, SOCIAL
AND ENVIRONMENTAL INFORMATION
ENERGY TRANSITION
| 64% OF RENEWABLE ENERGY in the financing of electricity
generation in terms of number
of projects in 2018
|
43.3 BILLION EUROS in transactions related to the energy
transition in 2018 |
HUMAN RESOURCES
| 43% OF WOMEN among the worldwide employees of Crédit
Agricole CIB |
72 % EMPLOYEES consider having a good work/life balance. |
COMPLIANCE THE
COMPLIANCE TRAINING SYSTEM CONSISTS OF
| 18 E-LEARNING TRAININGS (8 general trainings and 10 dedicated
trainings) |
14 NEW MODULES deployed in 2017 and 2018 |
1. OUR CSR STRATEGY:
PROGRESSIVE ACTIONS DRIVEN BY EMPLOYEES' INVOLVEMENT
Some of the information not included in this document can be found in the Crédit
Agricole
CIB Corporate Social Responsibility (CSR) policy, which is published on the Bank's
website. There you will find details about Crédit Agricole CIB's approach, its financing
and investment policies and their implementation, the protection of customer interests
and respect for ethics in business, its undertakings and actions as a responsible
and committed employer, the management of the impacts of the Bank's operations and
its policy on charities, sponsorship and supporting university research.
The following pages focus on the actions taken in 2018.
Although the developments below illustrate, for Crédit Agricole CIB, the implementation
of the Crédit Agricole Group S.A. Vigilance Plan and the group's non-financial performance,
this chapter is neither a report on the implementation of the Vigilance Plan, nor
a declaration on the non-financial performance, both of which are presented in the
Crédit Agricole S.A. registration document.
1.1 OUR APPROACH
Crédit Agricole
CIB
Crédit Agricole CIB's CSR approach is based on that of the Crédit Agricole S.A.
Group,
with a focus on three ambitions:
| ― |
y supporting the French territories in addressing their sustainable
development challenges;
|
| ― |
striving for excellence in our relations with our customers and
employees and in our
operations;
|
| ― |
managing all risks, including non-financial ones.
|
The Bank has entered into stringent societal commitments which cover three priority
areas: the fight against climate change, preservation of biodiversity and respect
for human rights.
For several years now, these issues have been tackled by a three-part initiative:
| ― |
to reduce its direct environmental footprint;
|
| ― |
to measure and reduce environmental and social risks related
to its financing activity
(notably based on the Equator Principles, the CSR sector policies, and the introduction
of CSR scoring of corporate clients);
|
| ― |
to increase the positive impacts of its business through Sustainable
Banking.
|
In addition to controlling the Bank's direct environmental footprint, Crédit Agricole
CIB seeks through this initiative to tackle societal objectives and help its clients
overcome their social, environmental and solidarity related challenges.
Indosuez Wealth
Management
Built and structured within a Business Line CSR Committee, the CSR strategy of
Indosuez
Wealth Management, a wholly-owned subsidiary of Crédit Agricole CIB, is based on 3
main pillars: Human Resources, Client / Product and institutional, or "social economy".
The initiatives in place are reviewed and discussed at Business Line CSR Committee
meetings, held every six months. The work is carried out within three working parties
sponsored by a member of the Business Line Management Committee and involves employees
from each of the Indosuez Wealth Management entities and the CSR representatives of
these entities.
In line with the intention expressed by Crédit Agricole S.A. and the Group's commitment
to the principles of the United Nations Global Compact, the Wealth Management division
is working to embed sustainable development values at the heart of its business lines
by way of a pragmatic approach which builds on the specific achievements made to date.
Furthermore, in each Indosuez Wealth Management entity (France, Monaco, Luxembourg
and Switzerland), the CSR Managers are supported by a community of FReD contributors
who play an active role in implementing action plans.
1.2 GOVERNANCE
STRENGTHENED BY EMPLOYEES' INVOLVEMENT
Governance
Sustainable development challenges are taken into account by Crédit Agricole CIB
in
accordance with the general guidelines proposed by the CSR Department of Crédit Agricole
S.A. and validated by the CSR Committee of the Crédit Agricole Group. They are the
subject of two internal governance documents that define the framework.
The Sustainable Development division, which reports to the Corporate Secretary,
proposes
and coordinates Crédit Agricole CIB's sustainable development actions with the bank's
business lines and support functions.
An ad hoc committee, the Committee for the Assessment of Transactions with an Environmental
or Social Risk (CERES), chaired by the head of the Compliance function, acts as a
top-level committee of the system for evaluating and managing environmental and social
risks related to the activity. More specifically, this committee issues recommendations
prior to the Credit Committee meeting for all transactions whose environmental or
social impact it feels needs close monitoring. The CERES Committee validates the ratings
of the transactions in accordance with the Equator Principles, issues opinions and
recommendations on transactions classified as sensitive in respect of environmental
and social aspects, and approves the CSR sector policies prior to their validation
by the Strategies and Portfolios Committee.
The CERES committee met four times in 2018 to discuss issues such as: the review
of
transactions signed-off during the year and the approval of ratings according to the
Equator Principles, the monitoring of sensitive transactions, approval of draft sector-wide
policies prior to their presentation to the Strategies and Portfolio Committee, and
the presentation of work carried out as part of the FReD plans.
In 2018, the CERES Committee specifically reviewed 43 transactions before they
were
sent to the Credit Committee, given their importance and the sensitivity of the potential
environmental or social impacts identified. Its recommendations led in two instances
to a decision not to pursue a commercial opportunity and in sixteen instances to impose
special environmental and social risk management conditions.
Employees at the
heart of the implementation
The model developed by Crédit Agricole CIB is based on the daily involvement of
all
employees as agents of sustainable development in their work, in order to assess and
manage direct or indirect environmental risks.
Client managers and senior bankers are responsible for analysing environmental
and
social challenges related to their client portfolio. Whenever necessary, they call
on the Sustainable Development team, and submit the most complex transactions from
an environmental or social point of view to the CERES committee.
The gradual incorporation of sustainable development priorities into our operations
(widening the scope of application of the Equator Principles, sector wide CSR policies,
scoring of corporate clients, etc.) and our decision to make employees a central part
of the strategy has led the Bank to step up training for employees to raise their
awareness of CSR matters. The action plan aimed at strengthening the CSR culture,
implemented in 2017, was extended in 2018 to international entities.
Significant Events
in 2018
Roll-out of CSR
in Nordic countries and sharing best practices
The Nordic countries are recognised as being very advanced in the area of sustainable
development and CSR. The preservation of the environment is deep-rooted in these countries,
which are pioneers in several social and societal areas (such as gender equality,
promotion of diversity and prevention and treatment of disabilities). It was therefore
perfectly natural that Crédit Agricole branches in Sweden and Finland implemented
and strengthened Crédit Agricole CIB's CSR policy locally, with a view to making it
a global project, helping to mobilise people internally and also in relation to external
stakeholders. An initial part of the policy consists of actions aimed at reducing
the direct environmental footprint of branches (energy consumed, fleet of vehicles,
elimination of plastic).
Several initiatives to engage with various stakeholders (clients, students, chamber
of commerce, administration etc.) have also been organised in relation to societal
issues, with the Bank suggesting solutions.
Implementation of these initiatives has been facilitated thanks to the creation
of
a local CSR team and an ad hoc committee.
1.3 AN APPROACH
FOCUSING ON ONGOING PROGRESS AND LISTENING TO OUR STAKEHOLDERS
The FReD approach
Crédit Agricole CIB and CA Indosuez Wealth Management are fully involved in the
Crédit
Agricole Group's FReD progress driven approach. For each participating entity, the
process intended to strengthen CSR within the Group consists in 12 action plans focused
on three key areas involving clients (Fides), employees (Respect) and the environment
(Demeter). Specific and measurable objectives are defined for each plan, and the overall
aim is to make yearly progress at an average rate of 1.5 levels on a four level progression
scale (plans implemented before 2017 retain their five level scale).
In 2018, the average level of progress recorded by the 12 action plans of Crédit
Agricole
CIB was 1.75, comparable to the level reached in 2017.
In 2018, the average level of progress recorded by the action plans of the Indosuez
Wealth Management Group was 1.69.
Relationships
with stakeholders
We believe that listening to stakeholders is a basis for ongoing progress. Several
meetings with non-governmental organisations took place in 2018. Crédit Agricole CIB
also actively participated, in various forums, particularly the European Economic
and Social Committee and in several days dedicated to climate finance in November
2018 in Paris.
Continuing the work started in 2017 as part of the Equator Principles association;
Crédit Agricole CIB also played an active role in the process of revising the Equator
Principles announced in November 2017, in particular by managing a working party on
standards applicable to projects in developed countries.
2. PROMOTING AN
ETHICAL CULTURE
The Crédit Agricole CIB group has adopted the Crédit Agricole group's approach
to
positioning ethics as one of its priorities. It promotes group initiatives which aim
to exceed regulatory standards and establish an ethical culture.
2.1 DEVELOPING
AN ETHICAL DIMENSION IN BUSINESS
The mission of the Compliance function is to contribute to the activities and transactions
of the Bank and its employees respect legislation and regulations, internal and external
rules, and the professional and ethical standards in banking and finance applicable
to the Crédit Agricole CIB group's activities.
The code of conduct
En 2014, Crédit Agricole CIB launched several initiatives to strengthen the compliance
and ethical culture. This initial work gave Crédit Agricole CIB, in 2015, a code of
conduct consisting of a common foundation of 7 principles intended to align behaviours
with the Bank's values and thus guide employees on a daily basis. More recently, the
Crédit Agricole CIB group joined the Crédit Agricole group approach by adopting the
Group Ethical Charter. This year Crédit Agricole CIB reviewed its code of conduct
to take account of and set out all of the themes of the Ethical Charter, and the Wealth
Management business line has written and distributed its own code of conduct. These
codes of conduct aim to:
| ― |
assert our principles and ethical values;
|
| ― |
engage with our clients and group partners.
|
Training of directors
and managers
In accordance with the guidelines of the European Banking Authority and the provisions
of the French Monetary and Financial Code, Compliance officers train members of the
Board of Directors in current regulatory issues.
Members of the Crédit Agricole CIB Board of Directors are thus trained in compliance
issues on a yearly basis. In 2018, Board members were made aware of recent regulatory
developments, particularly in relation to international sanctions, measures to combat
money laundering and the financing of terrorism, competition law and measures to fight
corruption. At the same time, compliance training courses were also made available,
with summaries of the main issues in the area.
The Holding company of the Wealth Management business line, although not subject
to
the requirements of the authorities, has applied the system proposed by Crédit Agricole
S.A. Group. Consequently every year members of the Board of Directors of the Holding
company are trained in compliance issues.
Deploying a responsible
compliance policy
FIGHTING CORRUPTION
The Crédit Agricole CIB group applies, at the highest level, a zero tolerance policy
for any unethical behaviour in general, and any risk of corruption in particular.
This policy illustrates the group's long-standing commitment to business ethics, a
key element of its corporate social responsibility policy. It fits well with the compliance
and financial security programmes of the Crédit Agricole Group, aiming to ensure transparency
and loyalty to customers, to contribute to the integrity of financial markets and
to combat money laundering and fraud.
The group's commitment to fighting corruption is reflected in the BS 10500 certification
obtained in 2016, and then the award to the Crédit Agricole Group in 2017 of the ISO
37001 international standard for its anti-corruption system. The latter recognises
its determination and the quality of its corruption prevention programme. It proves
that corruption risks have been correctly identified and analysed and that the programme
has been designed to limit these various risks, applying the best international practices.
This certification covers all the business lines and support functions of the Crédit
Agricole CIB group.
Against the backdrop of increased legal obligations for fighting corruption, in
2018
Crédit Agricole CIB initiated an action plan in order to implement "the measures aimed
at preventing and detecting corrupt practise", as referred to in article 17 of the
so-called Sapin 2 law of 9 December 2016 on transparency, fighting corruption and
the modernisation of the economy. Existing systems for fighting corruption have been
strengthened by the implementation of the recommendations of the French Anti-corruption
Agency (AFA). The Group has implemented specific governance to develop the behaviours
to be adopted in order to avoid any lapses in probity. Crédit Agricole CIB has thus
written and distributed an anti-corruption code of conduct.
PREVENTING FRAUD
AND CYBER CRIME
Crédit Agricole CIB continues to strengthen its systems for preventing internal
and
external fraud, against the backdrop of increased frequency and growing complexity
of fraud, particularly through cyber crime.
Correspondents of the anti-fraud division within the business lines and support
functions
are regularly trained in risk elements. Warning and vigilance messages are sent to
all employees, primarily via the Crédit Agricole CIB Intranet site. Targeted prevention
actions are undertaken to advise and support employees in their choices and to help
them to reconcile issues relating to ethics, professional behaviour, objectives and
obligations. These actions enable a culture of probity to permeate all levels of the
company; the controls and procedures associated with any lapses provide an appropriate
management of any behaviours which may harm, directly or indirectly, clients, the
bank and its employees.
FIGHTING MONEY
LAUNDERING AND THE FINANCING OF TERRORISM
The Compliance Department of the Crédit Agricole S.A. group is responsible for
the
implementation by the group as a whole of a financial security system, consisting
of a set of measures aimed at fighting money laundering and the financing of terrorism,
as well as ensuring compliance with international sanctions.
The Crédit Agricole Group has taken into account the requirements of the transposition
into French law of the fourth European directive 2015/849, approved by the European
Parliament on 20 May 2015, on preventing the use of the financial system for money
laundering and the financing of terrorism. A risk mapping was done and implemented
by all the Group's business lines, within the framework of the vigilance system adapted
to the level of the identified risk, both when entering into relationship and during
the entire business relationship.
Therefore, when entering into any relationship, the required client ID checks are
a first filter to prevent money laundering and the financing of terrorism. This preventative
measure relies on knowledge of the client and of the beneficial owners, completed
by data research through specialised databases. It also takes into account the purpose
and intended nature of the business transaction. During the business relationship,
there is an appropriate vigilance proportionate to the identified level of risks.
For that purpose, the Group's employees may use computer tools for client profiling
and for detecting unusual transactions.
The fight against the financing of terrorism and the system for ensuring compliance
with international sanctions means, in particular, a constant screening of client
files, both when entering into the relationship and during the relationship, with
a list of sanctions as well as the monitoring of international transactions.
Despite the computer tools available, human vigilance remains essential so all
employees
exposed to these risks are periodically trained in the fight against money laundering
and the financing of terrorism, and compliance with international sanctions.
REPORTING COMPLIANCE
MALFUNCTIONS
The entire compliance system (organisation, procedures, training programmes) creates
an environment conducive to the strengthening of ex ante control. Nonetheless, when
preventive measures fail and a malfunction occurs, Crédit Agricole CIB has specific
procedures in place to ensure that these malfunctions are:
| ― |
detected and then analysed as quickly as possible;
|
| ― |
brought to the attention of managers and compliance functions
at the most appropriate
level within each business line;
|
| ― |
monitored and solved, by establishing an action plan to resolve
the issues.
|
The centralisation of malfunctions through the reporting process, described in
a specific
governance text, makes it possible to measure, at the highest level of the company,
the Crédit Agricole CIB group's exposure to the non-compliance risk. Therefore, when
an employee reasonably establishes the existence of a malfunction in the field of
compliance, he must tell his supervisor who informs the operational heads and the
Compliance, Permanent Control and Legal functions depending on the subject. The system
is completed by a whistleblowing mechanism allowing any employee, if they find an
abnormality in the treatment of a malfunction which they consider is due to a deficiency
of, or pressure exercised by, their manager, or if they think they are being submitted
to pressure, active or passive, that may lead them to cause a dysfunction or to conceal
it, to inform their compliance manager and/or, if they so wish, their manager's direct
superior of the situation. In 2018, the Crédit Agricole CIB group participated in
the project to strengthen the whistleblowing system by deploying, as a pilot entity,
a new tool which allows employees to report alerts in a confidential and secure manner.
This tool also enables the confidentiality of the facts reported, any people involved
and conversations which may occur between the whistle-blower and the officer responsible
for processing the alert, to be ensured.
The state of the dysfunction is monitored by the Global Compliance Department which
will submit it to the Compliance Management Committee.
SPREADING THE
COMPLIANCE CULTURE
The Crédit Agricole S.A. Compliance Department has developed a training programme
covering Compliance issues. This programme has been delivered by human resources to
all Crédit Agricole CIB Group employees.
At the same time, the Crédit Agricole CIB Compliance Department's units with expertise
in various topics provide both e-learning and classroom training in their area of
expertise to targeted groups. In addition, the annual Affirmation Campaign reminds
employees of their main Compliance obligations.
A continuous training action plan, which mostly involves e-learning, improves employee
awareness of all Compliance and Financial Security issues, which are constantly changing.
MANAGEMENT OF
ACTIVITIES AND PRODUCTS DISTRIBUTED
The Crédit Agricole CIB group designs and distributes new products, activities
and
services for its customers, in a secure manner thanks to the implementation of a management
system for this process called "NAP Committee" (New Activities / New Products). Any
new product, activity or service must go through the NAP process so that all support
functions can analyse them. In this way, any product, activity or service envisaged
is approved by an NAP committee whose decision is based on an analysis of all risks
and a confirmation of its compliance with regulations as well as the group's strategy.
The NAP committee process also involves a CSR analysis and the systematic provision
of a legal and compliance opinion.
Implementing a
transparent lobbying policy
Crédit Agricole CIB acts within the framework of the Crédit Agricole S.A. Group
policy.
As a result of the entry into force of the Sapin II Law, Crédit Agricole CIB Group
introduced a system in 2017 to bring its Directors and interest representatives into
line with the reporting obligations.
2.2 SERVING CLIENTS
Protecting clients and their interests is central to Crédit Agricole CIB's concerns.
In this regard, the group does everything it can to protect its clients' data and
listen to their opinions.
Protecting data
Protecting data and using it correctly, in the interests of clients, the Bank,
its
employees and partners have always been major concerns for the Crédit Agricole CIB
group.
In 2017 the group adopted the Crédit Agricole Group's Charter on the "Use of Personal
Data", then the following year adapted its system in France and abroad in accordance
with the General Data Protection Regulations which came into force in May 2018.
Another strong sign of this commitment is Crédit Agricole CIB's deployment, during
an initial stage in France, of its NSU (New Solutions and Uses) system. This system
aims to pro-actively manage the risks (compliance, legal, IT security and operations
risks) associated with the implementation of new data solutions or new uses of data.
It offers all Business Lines and Support Functions a secure framework for the digital
transformation, innovation and the use of new technologies.
Ensuring quality
relationships
One of the principles of the Crédit Agricole CIB group is to develop long-term
relationships
with its clients based on trust and transparency.
In this regard, Crédit Agricole CIB has implemented a secure process for starting
these relationships and managing the sale of market-badsed products. The protection
of customers is based on a complete customer classification system which not only
involves applying the MiFID rules applicable in the European Economic Area, but also
worldwide after an internal process called " Internal suitability rating ". This system
forms part of the sales process, in particular so that the financial instruments offered
to customers are in line with their risk awareness.
Furthermore, Compliance pays particular attention to the commercial margins on
market-based
products and to the documentation intended for client information, while continuing
to file and retain the underlying data appropriately.
In addition, to support its clients' evolving needs, the Bank has set up an NAP
(New
Activities and Products) system which ensures that products and activities are appropriate
to the customer profile. Finally, in order to meet the new product governance obligations
imposed by MiFID 2, in early 2018 Crédit Agricole CIB set up a taxonomy for all products
handled by the Bank with its customers, and in parallel with the NAP system, a new
MiFID 2 product files committee was set up with a view to systematically defining,
prior to any transaction, the target market for each of the new products offered by
Crédit Agricole CIB to its customers.
Complaints
The Bank constantly strives to improve its customer protection measures by continuing
to finetune its complaints follow-up system. These complaints have to be systematically
recorded, communicated to a Complaint Correspondent appointed in each department of
the Bank, then replied to within ten days and processed within two months.
2.3 TAX POLICY
The Crédit Agricole CIB Group monitors the commitments made by the Crédit Agricole
S.A. Group in the area of prevention of the risk of tax fraud by its customers, prospects
or suppliers, since tax practices represent an important element of corporate social
responsibility. In this regard, the Crédit Agricole CIB Group ensures compliance with
all countries' fiscal regulations (ETNC, FATCA, AEOI, etc.). It also provides no help
or encouragement to customers, prospects and suppliers with infringing tax laws and
regulations, nor does it facilitate or support transactions where tax efficiency is
based on the non-disclosure of facts to the tax authorities. In this regard, the Crédit
Agricole CIB Group relies on a system to prevent facilitating tax fraud which is incorporated
into the fraud and corruption prevention system.
As part of its global strategy, after having supported its customers in compliance
with their tax duties under the Automatic Exchange of Information set up within the
European Union, the Wealth Management business line extended the scope of this initiative
to the countries who had adopted exchange agreements.
The standard requires financial institutions based in countries that have adopted
the standard to identify account holders who are tax residents of a country with which
an information exchange agreement has been entered into, and to report information
annually (contact information of the account holder, account balances, income received)
to their country's tax authorities.
The Indosuez Wealth Management Group has a basic rule of only working with customers
who meet their tax obligations. Wealth Management therefore intends to base itself
primarily on the systems in place in the different countries (the Automatic Information
Exchange systems in particular) to deal with the issue of customer Tax Compliance
(booking centres available to AEI countries, selection of customers living in these
countries).
Being responsible
along the entire chain
A governance document describes the procurement function's general operating principles
at Crédit Agricole CIB, within the framework of Crédit Agricole S.A. Group's Procurement
Business Line. These rules apply to all purchases made by Crédit Agricole CIB units.
This document emphasises the need to include, to the extent possible, a company from
the disability friendly sector in the list of subcontractors and suppliers. The MUST
RSE (MUST CSR) programme applied to purchases made by Crédit Agricole Group has made
it possible to manage legal, financial and reputational risks by applying best practices
in order to forge balanced relationships with suppliers. A number of achievements
have been made as a result of this programme, namely:
| ― |
adding a clause to our contracts which provides for the referral
to a mediator from
the Crédit Agricole S.A. Group, in the event of disagreements relating to the execution
of a contract between a supplier and the internal decision-maker, should both parties
fail to find a solution internally. The option of using a Group mediator is to prevent
the disagreement escalating into a dispute or court action;
|
| ― |
adding a sustainable development appendix to our contracts to
reiterate the Group's
commitments in this area and the expectations that we have of our suppliers;
|
| ― |
obtaining from third-party service providers CSR ratings on our
suppliers and prospects
during consultations or calls for tender.
|
In addition, the centralisation and processing of supplier invoices in an electronic
workflow brought improvements in our suppliers' invoice payment chain and faster invoice
processing times.
All the buyers have had training on the issue of human rights in the value chain.
The Indosuez Wealth Management group is continuing its policy launched in 2016
consisting
of a "Responsible Purchasing" governance and policy which is clear, homogeneous and
in line with the Crédit Agricole Group S.A. strategy.
The responsible purchasing policy's defining issues and priorities include Human
Rights,
Industrial Relations and Working Conditions, the Environment, Fair Business Practices,
Diversity and Communities and Local Development.
3. INCORPORATING
CLIMATE CHANGE PRIORITIES
This year, as in 2016 and in 2017, the steps taken to integrate climate change
challenges
are presented according to the five "Main-streaming Climate Action within Financial
Institutions" principles signed at the COP21 climate conference in Paris by a group
of multilateral, development and commercial banks, which included Crédit Agricole.
These five principles provide encouragement to:
| ― |
pursue a climate friendly strategy;
|
| ― |
managing climate risks;
|
| ― |
promote smart climate objectives;
|
| ― |
improve climate related results;
|
| ― |
report on climate action.
|
3.1 PURSUING A
CLIMATE FRIENDLY STRATEGY
Crédit Agricole CIB has drawn up a climate policy which reflects the different
climate
challenges identified:
| ― |
financing the energy transition;
|
| ― |
managing climate risks;
|
| ― |
reducing its direct carbon footprint as far as possible.
|
This policy was published in 2017 in the document presenting our CSR policy "Crédit
Agricole CIB, a useful and responsible Corporate and Investment Bank".
This policy reflects the high level of involvement of the decision-making bodies
and
is part of the various commitments of the Crédit Agricole Group and its corporate
and investment bank in this area since the adoption of the Climate Principles in 2008.
The policy includes:
| ― |
ambitious objectives in terms of financing the energy transition,
|
| ― |
realistic but demanding support for our customers in this transformation,
which must
be a gradual one,
|
| ― |
major efforts to measure and manage our indirect carbon footprint,
and a renewed commitment
to managing our direct footprint.
|
Significant Events
in 2018
CSR sector policies
and fossil fuels
Crédit Agricole CIB revised its CSR sector policy in the area of oil and shale
gas
in April 2018. This revision aims to exclude the financing of fossil fuels associated
with excessive fugitive methane emissions.
This development completes the general policy of withdrawing finance from coal-related
activities (begun in 2015 and completed in 2016) and from the worst performing fossil
fuels in energy terms and those which are most dangerous for the environment (oil
sands, extra-heavy oil, oil projects in the Arctic etc.) published in 2017.
3.2 MANAGING OUR
CLIMATE RISKS
For a number of years, Crédit Agricole CIB has undertaken work designed to better
understand and manage climate risks:
| ― |
by evaluating the carbon footprint caused by its financing and
investment portfolio
and defining the sector wide policies for sectors which account for a large proportion
of this footprint (over 80% of this footprint on a cumulative basis);
|
| ― |
by seeking to identify the materiality of the climate risks and
by gradually introducing
additional analyses for customers appearing to present the highest risk.
|
Measuring and
mapping climate challenges
Since 2011, Crédit Agricole CIB has used a procedure to calculate greenhouse gas
emissions
said to be financed by a financial institution. The procedure was developed at its
request by the Chair in Quantitative Finance and Sustainable Development at Paris
Dauphine University and École Polytechnique. This innovative P9XCA methodology has,
since 2014, been recommended for corporate and investment banks in the financial sector
guide to "Conducting a greenhouse gas emissions audit" published by the Agency for
Environment and Energy Management, the Observatory on Corporate Social Responsibility
and the Bilan Carbone Association.
It enables Crédit Agricole CIB to calculate, without multiple counting, the order
of magnitude of the emissions financed and map them according to sector and geographical
location. Greenhouse gas emissions are allocated to economic players according to
their capacity (and their economic interest) to reduce them according to an allocation
described "by issue" as opposed to the usual allocation "by scope" (see sectoral guide).
This methodology gives us a sectoral and geographical mapping of the carbon issue
which has guided the choice of sectors of the bank for the development of sectoral
CSR policies and has been used in methodologies and calculations linked to the transition
climate risk presented below. Certain methodological adjustments were made in 2018
in parallel with the revision of emission factors. These changes are presented in
part 3.4 (see box).
Furthermore, mapping of the challenges linked to physical climate risk is under
way,
combining sector based and geographical vulnerability indices.
Scenario and materiality
of climate risks
In line with the recommendations of the Task force on Climate-related Financial
Disclosures
(TCFD), sensitivity to climate risks was assessed in 2017 within the framework of
various scenarios. The four scenarios tested in 2017 stand out due to the scope of
the mitigation measures and the gradual nature of their implementation. These scenarios
identify three timescales: short term (before 2020); medium term (From 2020 to 2030)
and long term (after 2030). They are outlined briefly below.
Each scenario led to a climate trajectory and to a carbon price level in line with
the scope of the mitigation measures. Research has therefore been carried out into
the potential impact on the profitability of companies which are Investment Banking
clients both as regards the physical climate risk and the transitional climate risk.
Regarding the physical risk, the average potential impact on the added value of companies
has been considered to directly reflect the impact of global warming on global revenues
as generally estimated (without taking into account, at this stage, the different
impacts according to sector and country).
For the transitional risk, the potential vulnerability of companies was assessed
using
the emissions allocated to the economic players in the sectors and countries defined
in P9XCA (in the by challenge version) and correlated with their added value. Valued
at the carbon price selected for each scenario, these emissions make it possible to
provide an initial economic assessment of the carbon challenge for each macro sector
and country. Based on several studies concluding that a controlled energy transition
would not damage growth (see below), it was believed that the carbon challenge would
impact companies differently depending on their ability to anticipate and therefore
the rate of progress to implement measures to adapt to this risk.
These calculations are by necessity approximate but provide insight into the orders
of magnitude and make it possible to compare the potential impacts on sectors and
countries depending on the scenarios and time-scales used. The calculations show the
transitional climate risk in the "sudden progress" scenario as the main medium-term
risk, while underlining the strong increase in the physical climate risk over time,
notably in the scenario involving no new mitigation measures.
They also provide an initial macroeconomic insight into climate risks by highlighting
the main risk areas (sectors and countries) according to the various scenarios and
time-scales. For the medium-term transitional risk, identified as the main potential
risk, a complementary microeconomic approach has been developed which seeks to differentiate
it at individual counterparty level.
Transition risk
index
For financial players, the transitional climate risk arises mainly from the uncertain
return from their customers' investments and changes in the financial models which
result from the changes in the economic environment brought about by initiatives against
global warming (introduction of a carbon price, regulatory changes). An OECD study
published in May 2017, "Investing in Climate, Investing in Growth", concluded that
a controlled energy transition is favourable to the economic growth of the G20 countries,
backing up the conclusions of a study by the French Environment and Energy Management
Agency (ADEME) in 2016 (An electricity mix from 100% renewable sources? Technical
summary and macroeconomic evaluation summary) for France. It would seem, therefore,
that the impact of the energy transition will not necessarily be negative for economic
players. Rather, it will be important to be able to identify the winners and the losers
in this major change. The potential impact of the energy transition on the financial
performance of a company would therefore seem to depend on both the potential sensitivity
of the company to the transition (due to its business sector and geographical location)
and its ability to manage the transition (level of anticipation and strategy).
The economic player's potential sensitivity to the transition challenge depends
on
how much pressure it is under. This, in turn, depends on the extent to which it operates
independently of the measures it puts in place.
It is a measure of the extent of the potential positive or negative impact of the
energy transition for the economic player, which can be described as a combination
of two factors: the extent to which the challenges will affect the sector, based on
the sector's carbon intensity; and the importance the country in question places on
reducing greenhouse gas emissions.
The ability to manage the transition challenge determines whether or not the economic
player has the right strategy and has taken the right measures to enable it to gain
from the energy transition. It seems to us that this level of "maturity" should be
assessed relative to the business sector, across all geographical locations.
A medium-term transition risk index has therefore been calculated since 2017 for
the
Bank's corporate customer groups using a combination of three factors:
| ― |
the extent to which the issues will impact financing in the sector,
as calculated
by the P9XCA methodology adopting an issue based approach;
|
| ― |
the importance the country places on reducing greenhouse gas
emissions such as the
Intended Nationally Determined Contributions (INDC);
|
| ― |
The maturity of the customer when faced with climate challenges
and its ability to
adapt, as evaluated by a nonfinancial agency or estimated on the geographic average.
|
For each customer group, the transition risk index is calculated by adding together
these three factors. The index is positive when the counterparty demonstrates above
average preparedness and is negative if it does not. The more the customer stands
out from its peers, the more the sector is considered to be at risk, and the more
the country has committed to a rapid energy transition, the higher the absolute value
of the index.
Thus, a player in the Energy or Transport sectors in a country committed to significantly
lowering emissions will have more to gain or lose than a player in a sector which
is less affected in a country with lower greenhouse gas reduction demands. The extent
to which this actor is affected will depend on its ability to adapt its strategy and
economic model to the new situation.
Reducing climate
risks
The CSR sector policies are the first line tool for managing environmental and
social
risks, particularly the transitional climate risk. These policies cover the macrosectors
of energy and transport, which account for over 80% of the carbon footprint caused
by our finance. In particular, the policies on fossil fuels do not usually include
transactions relating to activities which seem the least compatible with the developments
expected in light of the energy transition and thus potentially the most risky as
regards the transitional climate risk.
The transitional risk index completes this approach by making it possible to identify
customers for which additional analyses seem necessary in view of their exposure to
the transition risk and management of this risk. This approach applies to all sectors
and all countries.
3.3 PROMOTING
SMART CLIMATE OBJECTIVES
Financing the energy transition represents a major societal challenge, as highlighted
in the latest assessment report by the Intergovernmental Panel on Climate Change (IPCC).
The IPCC estimates the volume of climate related financing at approximately USD 350
billion per year, with most of this amount targeting mitigation measures. The private
sector accounts for approximately two thirds of the total financing.
Crédit Agricole CIB actively contributes to meeting this objective:
| ― |
by developing its financing of climate-friendly projects and
green bond projects,
with a view to structuring increased new financings of USD 60 billion between December
2015 and the end of 2018, to €100 billion by 2020;
|
| ― |
and to seek relevant partnerships.
|
Project finance
Financing renewable energies is an integral part of Crédit Agricole CIB's strategy,
and the Bank is a leading provider of such project financing. The Bank first entered
this sector in 1997 by financing the first wind farms, and in 2008 it financed a solar
energy project in Spain. The Project Finance business line has financed a total of
435 wind farms generating more than 24,000 MW and 1,006 solar farms representing almost
9,000 MW in installed capacity (including 993 photovoltaic plants for 8,300 MW and
13 solar thermal power plants for 650 MW).
Green bonds and
Sustainability bonds
Green bonds can play a prominent role in steering bond markets toward financing
initiatives
that help fight climate change. In addition, social and environmental bonds, also
known as Social and Sustainability Bonds, create a link between market products and
the infrastructures needed to build a more equitable society. They also provide investors
with specific indicators on the financed projects as well as their social impacts
and environmental benefits. A growing number of investor clients value this information
and the additional commitment by issuers.
Committed to this market since 2010, with the creation of a dedicated team, Sustainable
Banking, Crédit Agricole CIB is consolidating its leading position as an arranger
on the Green bonds, Social bonds and Sustainability bonds market on a global scale,
and is arranging numerous transactions on its own account (see following part).
Crédit Agricole CIB was also instrumental in introducing several major innovations
to this market:
| ― |
the first green bond to disclose estimated social and environmental
impacts (KfW);
|
| ― |
the first topical covered issue ever made (Munich Hypothekenbank);
|
| ― |
the first green Pfandbrief (Berlin Hyp);
|
| ― |
the first social covered bond (Kutxabank);
|
| ― |
the first transaction involving a property company (Unibail Rodamco);
|
| ― |
the first asset backed green bond transaction (Toyota);
|
| ― |
the first euro denominated green high yield bond (Abengoa);
|
| ― |
the first green bond for an Italian issuer (Hera);
|
| ― |
the first green bond for a Mexican issuer (Nacional Financiera);
|
| ― |
the first green bond for a Finnish issuer (MuniFin);
|
| ― |
the first green bond for a Korean issuer and the first asset
backed green bond transaction
in Asia (Hyundai Capital Services);
|
| ― |
the first green bond for a Chinese issuer outside the domestic
market and largest
ever green bond issue (Bank of China);
|
| ― |
the first green bond in the private sector in India (Axis Bank);
|
| ― |
the first social bond benchmark for a Dutch issue (BNG);
|
| ― |
the first Social Bond for a corporate issuer (Danone);
|
| ― |
the first US dollar-denominated climate awareness bond by the
European Investment
Bank;
|
| ― |
the inaugural green bond benchmark transactions for Nordic Investment
Bank, the French
Development Agency, Lloyds Bank and BNG Bank;
|
| ― |
the structuring of the first Green Bond programme offering different
options: covered
Pfandbrief and senior unsecured (Berlin Hyp);
|
| ― |
the first Green Bond of a major sovereign issuer for the French
Republic;
|
| ― |
and several issues for French public authorities (Île-de-France
regional authority,
Essonne departmental authority) or other European regions (issue of sustainability
bond by Land NRW, first thematic issue by a German region).
|
The Green bond, Social bond and Sustainability bond markets continued to grow in
2018,
with highlights including the inaugural issue by the Kingdom of Belgium, the second
major sovereign issuer of Green Bonds after France, with the support of Crédit Agricole
CIB which participated in the structuring.
2018 was also marked by the announcement of the European Commission's Action Plan
for Sustainable Finance aiming to support the development of responsible finance,
including the Green Bond market. The first phase in 2018 was based on the work of
the Technical Expert Group (TEG). The manager from the Crédit Agricole CIB Sustainable
Banking team is a member of the TEG and represents the European Association of Cooperative
Banks.
Finally, Crédit Agricole CIB remains committed to governance of the Green Bond,
Social
Bond and Sustainability Bond markets. The Bank is a founding member of the Green Bond
Principles and an active member of the Executive Committee of this financial market
initiative. The Bank is also behind the Social Bond Principles, the governance of
which has been incorporated into that of the Green Bond Principles.
In a determined effort to support the development of this market and educate all
parties,
in 2018 the Bank either organised or participated in numerous international green
bond and sustainability bond events, particularly in Asia in Tokyo and Hong Kong.
Liquidity green
supporting factor
To support its business lines in this area, Crédit Agricole CIB enables climate
change
projects to benefit from more favourable internal costs for accessing funds. This
makes it possible to offer attractive conditions to investors, thus increasing the
amount of responsible finance.
Indosuez Wealth
Management
As part of its socially responsible investment policy in Wealth Management, Indosuez
Wealth Management has created a "Carbon Impact" rating and selects specific thematic
funds ("Low Carbon", energy transition etc.).
3.4 IMPROVING
OUR CLIMATE RESULTS
Since 2011, in addition to the standard greenhouse gas (GHG) calculations shown
in
the "Limiting our direct environmental footprint" section, an estimation of the Bank's
financing and investment carbon footprint is now in place, using the P9XCA methodology.
This calculation showed an indirect carbon footprint about one thousand times higher
than the total operating emissions estimated for Crédit Agricole CIB, reflecting the
carbon intensity of activities financed and corresponding to the Bank's active role
in the financing of the world economy.
The calculation made every year from 2011 to 2017 with the original emission factors
shows a falling trend. Since annual variations were considered weak in relation to
the precision of the calculation, it was decided to only publish annually the order
of magnitude found, namely 100 Mt equivalent of CO2. In 2018, all of the
parameters were updated, leading to new emission factors and
certain adjustments in methodology. The new order of magnitude, on the basis of the
amounts outstanding at 31 December 2018, was 60 Mt equivalent of CO2, i.e.
a carbon intensity in the order of 250 t of CO2per million euros of financing.
The main factors explaining this development are presented
in the box below.
The CSR sector policies and the transition risk index help both reduce the climate
risks of Crédit Agricole CIB (see above) and improve climate related results. The
transition risk index makes it possible to develop a generalised consideration of
this matter across all sectors and countries. Reflecting the positioning of each customer
as regards the energy transition, this approach appears to be both more precise and
more relevant than one that is only based on successive sector based exclusions.
While it may seem difficult to measure the alignment of the Bank's operations with
the Paris climate agreement or a particular climate scenario, given the number and
variety of operations and customers, good climate finance performance bears witness
to the positive work done by Crédit Agricole CIB in this area.
In terms of number of loans, renewable energy represented over 64% of electricity
generation project finance in 2018.
In 2018, Crédit Agricole CIB also arranged USD 48.1 billion in Green Bonds, Social
Bonds and Sustainability Bonds for its major clients. The Bank received recognition
for the fifth consecutive year (2014, 2015, 2016, 2017 and 2018) from Global Capital
for its Green Bond origination efforts and was named "SRI Bond House of the year"
by the IFR review in 2015, 2016, 2017 and 2018.
Crédit Agricole CIB arranged 43.3 billion euros billion in transactions relating
to
the energy transition in 2018. The target in structuring €100 billion in new climate
related financing by the end of 2020, an objective announced at the COP23 climate
conference has then been exceeded, the aggregate amount since the end of 2015 currently
stands at 114.3 billion euros at December 31, 2018. The Bank's success on the Green
and Sustainability Bonds market in 2016 and the end of 2018 was one of the major factors
in achieving this objective.
Significant Events
in 2018
Updating of the
P9XCA emission factors
The emission factors are down overall by in the order of 30% in 7 years with strong
regional and sectoral dispersion. The reduction is thus in the order of 60% for strongly
growing economies such as China and India and very slightly up for Japan.
Changes in emission factors are the result of the combination of several factors:
| ― |
a rise in national emissions (average rise of 12%)
|
| ― |
economic growth superior to the rise of emissions (77% on average)
|
| ― |
an evolution of the Debt + Equity / Added value ratio (+20% on
average)
|
Whilst greenhouse gas emissions have continued to grow globally, the carbon intensity
of the economy does appear to be improving and the average fall of the carbon intensity
per euro of financing is 30%.
At the methodological level, the question of a partial allocation of emissions
to
consumption has been considered. The development of a differentiated offer in terms
of carbon content (energy classes in the home, electric cars etc.) could justify such
a development. However, the complexity of the subject and the absence of reliable
data which can be used at a global level have contributed to the current convention
(of allocating all global emissions to production activities) being maintained.
Since the Debt + Equity / Added value ratio has been unstable over time, the average
of this ratio for the period 2008-2015 was chosen. This was the main methodological
adjustment made when emission factors were updated.
3.5 REPORTING
ON OUR CLIMATE ACTION
Financial institutions, particularly in the private sector, are faced with a major
dilemma regarding the disclosure of their actions. On the one hand, they are bound
by a duty of confidentiality towards their customers. On the other, public interest
groups continue to demand greater transparency and comparability. Other major hindrances
to accurate reporting of actions performed are the large numbers of customers and
transactions, the low relevance of international economic classifications to climate
issues and the wide range of bank loans.
Crédit Agricole CIB is nevertheless making major efforts in terms of transparency
by publishing its environmental and social evaluation and exclusion criteria in its
sector wide CSR policies and presenting its climate risk assessment approach and tools.
In a spirit of Corporate Social Responsibility, this transparent approach meets the
recommendations of TCFD and the requirements of Article 173 of the law on energy transition
for green growth.
Crédit Agricole CIB encourages its customers to also engage in this transparency
approach.
This is embodied in the Equator Principles, which contain an obligation for customers
to publish certain information. This is also true of the Green Bond Principles, which
aim to increase transparency on the market by encouraging issuers to regularly publish
their reporting on fund allocation and on environmental and social impact measures
for financed projects. Talks are underway intended to further improve the Bank's reporting
on climate action.
4. HELPING OUR
CLIENTS TO MEET THEIR SOCIAL, ENVIRONMENTAL AND SOLIDARITY RELATED
CHALLENGES
Helping our clients to meet their social, environmental and solidarity challenges
is an essential component of our CSR approach. We primarily achieve this by:
| ― |
offering dedicated funds to finance environmental projects (green
notes);
|
| ― |
advising our customers on social and environmental projects;
|
| ― |
promoting Socially Responsible Investment in Wealth Management;
|
| ― |
assessing and managing the risks inherent in the environmental
and social impacts
of our financing.
|
4.1 OFFERING DEDICATED
FUNDS TO FINANCE ENVIRONMENTAL PROJECTS: GREEN NOTES
Concept - Description
In 2013, Crédit Agricole CIB developed a new product: the "Crédit Agricole CIB
Green
Notes". The Green Notes are bonds or any other financial instrument issued by Crédit
Agricole CIB whose funds raised is dedicated to funding environmental projects.
In 2018, Crédit Agricole put in place a "Green Bond Framework" to serve as a common
framework for all the Group's issuing entities, including Crédit Agricole CIB, for
their respective Green Bond issues. This framework, which enabled Crédit Agricole
S.A. to successfully launch its €1 billion inaugural issue of Green Bonds on 28 November
2018, is set to replace, from 2019 onwards, the existing Crédit Agricole CIB Green
Notes Framework.
For its Green Notes, Crédit Agricole CIB has followed the principles laid down
by
the Green Bond Principles which are voluntary principles for the formulation of green
bonds and for market guidance. Green Bond Principles are offered by the major green
bonds arranging banks, including Crédit Agricole CIB.
Crédit Agricole CIB's Green Notes are presented based on four structuring lines,
defined
by the Green Bond Principles:
| ― |
use of the funds;
|
| ― |
project assessment and selection;
|
| ― |
funds monitoring;
|
| ― |
Reporting.
|
The implementation of the Green Bond Principles is described on the Bank's website
(www.ca-cib.com).
Second opinion
Since April 2015 the Crédit Agricole CIB Green Notes have benefited from a second
opinion from the extra-financial ratings agency Sustainalytics. Sustainalytics experts
approved the methods used to select the projects to be included in the Green portfolio,
as well as the relevance of the chosen sectors to climate change prevention.
Inventory
GREEN NOTES OUTSTANDINGS
At 31 December 2018, the amount outstanding of Green Notes and similar debt products
issued by Crédit Agricole CIB enabling the financing of green loans according to the
eligibility criteria defined below, was €1,864 billion.
| Issue date |
Maturity (years)
|
Currency |
Amount in currency (million)
|
Equivalent amount in € million
|
| 08/07/2013 |
7 |
BRL |
0.9 |
0.2 |
| 24/09/2013 |
7 |
JPY |
5,410.0 |
43.0 |
| 06/03/2014 |
5 |
JPY |
120.0 |
1.0 |
| 29/05/2014 |
5 |
JPY |
331.0 |
2.6 |
| 24/07/2014 |
18 |
EUR |
30.0 |
30.0 |
| 29/07/2014 |
5 |
JPY |
100.0 |
0.8 |
| 28/10/2014 |
5 |
INR |
1,650.0 |
20.7 |
| 18/11/2014 |
5 |
USD |
15.0 |
13.1 |
| 25/11/2014 |
5 |
MXN |
350.0 |
15.6 |
| 25/11/2014 |
5 |
AUD |
32.0 |
19.7 |
| 28/11/2014 |
5 |
USD |
16.9 |
14.8 |
| 28/11/2014 |
5 |
NZD |
23.0 |
13.5 |
| 28/11/2014 |
4 |
AUD |
57.9 |
35.7 |
| 10/12/2014 |
5 |
USD |
10.0 |
8.7 |
| 19/12/2014 |
5 |
INR |
1,050.0 |
13.2 |
| 23/02/2015 |
5 |
INR |
1,250.0 |
15.7 |
| 26/02/2015 |
4 |
IDR |
32,000.0 |
1.9 |
| 16/04/2015 |
5 |
USD |
20.0 |
17.5 |
| 20/10/2015 |
4 |
TRY |
114.0 |
18.8 |
| 06/11/2015 |
4 |
EUR |
10.2 |
10.2 |
| 28/01/2016 |
3 |
INR |
110.0 |
1.4 |
| 31/03/2016 |
10 |
EUR |
11.4 |
11.4 |
| 02/06/2016 |
10 |
EUR |
0.5 |
0.5 |
| 02/06/2016 |
5 |
AUD |
64.2 |
39.6 |
| 03/06/2016 |
3 |
BRL |
578.9 |
130.3 |
| 20/06/2016 |
10 |
EUR |
0.5 |
0.5 |
| 21/06/2016 |
12 |
EUR |
2.3 |
2.3 |
| 24/06/2016 |
4 |
AUD |
49.1 |
30.3 |
| 24/06/2016 |
4 |
NZD |
36.0 |
21.1 |
| 28/06/2016 |
4 |
BRL |
10.0 |
2.3 |
| 29/06/2016 |
3 |
BRL |
3.3 |
0.7 |
| 29/06/2016 |
3 |
INR |
470.0 |
5.9 |
| 28/07/2016 |
3 |
INR |
500.0 |
6.3 |
| 09/09/2016 |
11 |
EUR |
12.0 |
12.0 |
| 13/10/2016 |
4 |
INR |
65.0 |
0.8 |
| 17/11/2016 |
4 |
INR |
65.0 |
0.8 |
| 18/11/2016 |
11 |
EUR |
5.0 |
5.0 |
| 29/11/2016 |
11 |
EUR |
5.0 |
5.0 |
| 09/12/2016 |
3 |
INR |
445.0 |
5.6 |
| 14/12/2016 |
4 |
INR |
65.0 |
0.8 |
| 16/12/2016 |
11 |
EUR |
10.0 |
10.0 |
| 28/12/2016 |
10 |
EUR |
5.6 |
5.6 |
| 30/12/2016 |
10 |
EUR |
0.6 |
0.6 |
| 23/01/2017 |
10 |
EUR |
5.0 |
5.0 |
| 30/01/2017 |
3 |
BRL |
3.6 |
0.8 |
| 30/01/2017 |
3 |
RUB |
5346.0 |
67.1 |
| 03/02/2017 |
10 |
EUR |
1.2 |
1.2 |
| 27/02/2017 |
3 |
INR |
445.0 |
5.6 |
| 08/03/2017 |
10 |
JPY |
500.0 |
4.0 |
| 29/03/2017 |
15 |
EUR |
8.0 |
8.0 |
| 27/04/2017 |
10 |
EUR |
0.5 |
0.5 |
| 28/04/2017 |
10 |
EUR |
0.7 |
0.7 |
| 24/05/2017 |
10 |
EUR |
0.5 |
0.5 |
| 29/06/2017 |
5 |
IDR |
50,000.0 |
3.0 |
| 12/07/2017 |
5 |
USD |
120.0 |
104.8 |
| 26/07/2017 |
3 |
TRY |
6.4 |
1.1 |
| 27/07/2017 |
4 |
BRL |
6.0 |
1.4 |
| 29/09/2017 |
4 |
TRY |
322.0 |
53.1 |
| 29/09/2017 |
4 |
MXN |
165.0 |
7.3 |
| 13/10/2017 |
12 |
EUR |
2.9 |
2.9 |
| 19/10/2017 |
10 |
USD |
25.0 |
21.8 |
| 30/10/2017 |
12 |
EUR |
1.0 |
1.0 |
| 30/10/2017 |
3 |
INR |
291.0 |
3.6 |
| 21/11/2017 |
5 |
USD |
88.0 |
76.9 |
| 04/12/2017 |
12 |
EUR |
5.9 |
5.9 |
| 13/12/2017 |
7 |
EUR |
1.0 |
1.0 |
| 21/12/2017 |
4 |
INR |
87.0 |
1.1 |
| 29/12/2017 |
12 |
EUR |
8.8 |
8.8 |
| 11/01/2018 |
8 |
EUR |
3.0 |
3.0 |
| 30/01/2018 |
3 |
TRY |
290.0 |
47.9 |
| 26/02/2018 |
8 |
EUR |
65.0 |
65.0 |
| 27/02/2018 |
3 |
TRY |
9.5 |
1.6 |
| 27/02/2018 |
3 |
INR |
440.0 |
5.5 |
| 28/02/2018 |
12 |
EUR |
1.0 |
1.0 |
| 09/03/2018 |
8 |
EUR |
1.0 |
1.0 |
| 13/03/2018 |
10 |
EUR |
1.0 |
1.0 |
| 16/03/2018 |
8 |
EUR |
1.0 |
1.0 |
| 20/03/2018 |
3 |
INR |
180.0 |
2.3 |
| 05/04/2018 |
8 |
EUR |
0.5 |
0.5 |
| 06/04/2018 |
10 |
EUR |
0.5 |
0.5 |
| 10/04/2018 |
12 |
EUR |
1.0 |
1.0 |
| 10/04/2018 |
12 |
EUR |
1.0 |
1.0 |
| 23/04/2018 |
6 |
EUR |
70.0 |
70.0 |
| 23/04/2018 |
6 |
EUR |
10.0 |
10.0 |
| 30/04/2018 |
5 |
EUR |
4.0 |
4.0 |
| 09/05/2018 |
10 |
USD |
10.0 |
8.7 |
| 18/05/2018 |
6 |
EUR |
0.9 |
0.9 |
| 18/05/2018 |
2 |
GBP |
0.2 |
0.2 |
| 25/05/2018 |
5 |
USD |
5.3 |
4.7 |
| 11/06/2018 |
10 |
EUR |
2.5 |
2.5 |
| 18/06/2018 |
8 |
JPY |
2,000.0 |
15.9 |
| 21/06/2018 |
3 |
INR |
440.0 |
5.5 |
| 28/06/2018 |
4 |
USD |
0.8 |
0.7 |
| 29/06/2018 |
5 |
USD |
0.9 |
0.8 |
| 05/07/2018 |
10 |
JPY |
3,000.0 |
23.8 |
| 11/07/2018 |
5 |
EUR |
2.8 |
2.8 |
| 12/07/2018 |
3 |
USD |
6.5 |
5.7 |
| 17/07/2018 |
10 |
USD |
5.0 |
4.4 |
| 20/07/2018 |
7 |
SEK |
10.0 |
1.0 |
| 20/07/2018 |
7 |
SEK |
10.0 |
1.0 |
| 25/07/2018 |
10 |
USD |
10.0 |
8.7 |
| 30/07/2018 |
4 |
USD |
1.2 |
1.0 |
| 08/08/2018 |
3 |
INR |
354.0 |
4.4 |
| 10/08/2018 |
10 |
EUR |
0.3 |
0.3 |
| 21/08/2018 |
6 |
EUR |
0.5 |
0.5 |
| 29/08/2018 |
5 |
USD |
4.9 |
4.3 |
| 19/09/2018 |
8 |
EUR |
30.0 |
30.0 |
| 19/09/2018 |
10 |
EUR |
30.0 |
30.0 |
| 21/09/2018 |
7 |
USD |
1.0 |
0.9 |
| 25/09/2018 |
3 |
USD |
90.2 |
78.8 |
| 27/09/2018 |
3 |
NOK |
3.0 |
0.3 |
| 27/09/2018 |
5 |
SEK |
31.0 |
3.0 |
| 27/09/2018 |
5 |
SEK |
5.3 |
0.5 |
| 28/09/2018 |
10 |
JPY |
1,500.0 |
11.9 |
| 28/09/2018 |
5 |
USD |
0.6 |
0.5 |
| 28/09/2018 |
3 |
USD |
0.8 |
0.7 |
| 28/09/2018 |
2 |
USD |
1.6 |
1.4 |
| 28/09/2018 |
5 |
GBP |
4.5 |
5.0 |
| 03/10/2018 |
3 |
USD |
375.0 |
327.5 |
| 04/10/2018 |
7 |
JPY |
130.0 |
1.0 |
| 08/10/2018 |
10 |
EUR |
0.5 |
0.5 |
| 19/10/2018 |
10 |
USD |
5.0 |
4.4 |
| 25/10/2018 |
8 |
EUR |
1.0 |
1.0 |
| 30/10/2018 |
1 |
USD |
1.8 |
1.6 |
| 30/10/2018 |
3 |
USD |
3.6 |
3.2 |
| 30/10/2018 |
6 |
USD |
2.0 |
1.7 |
| 31/10/2018 |
7 |
USD |
17.6 |
15.4 |
| 01/11/2018 |
4 |
IDR |
20,000.0 |
1.2 |
| 01/11/2018 |
7 |
JPY |
50.0 |
0.4 |
| 01/11/2018 |
7 |
JPY |
100.0 |
0.8 |
| 12/11/2018 |
5 |
SEK |
69.0 |
6.7 |
| 12/11/2018 |
5 |
SEK |
7.1 |
0.7 |
| 12/11/2018 |
6 |
SEK |
39.8 |
3.9 |
| 23/11/2018 |
10 |
EUR |
2.6 |
2.6 |
| 23/11/2018 |
5 |
SEK |
10.0 |
1.0 |
| 05/12/2018 |
7 |
SEK |
10.0 |
1.0 |
| 07/12/2018 |
12 |
EUR |
5.0 |
5.0 |
| 11/12/2018 |
5 |
EUR |
10.0 |
10.0 |
| 11/12/2018 |
12 |
EUR |
3.8 |
3.8 |
| 12/12/2018 |
5 |
EUR |
5.0 |
5.0 |
| 14/12/2018 |
10 |
EUR |
2.0 |
2.0 |
| 18/12/2018 |
6 |
SEK |
31.4 |
3.1 |
| 18/12/2018 |
5 |
SEK |
24.1 |
2.4 |
| 18/12/2018 |
5 |
SEK |
6.5 |
0.6 |
| 20/12/2018 |
10 |
EUR |
0.5 |
0.5 |
| 20/12/2018 |
5 |
USD |
17.2 |
15.0 |
| 20/12/2018 |
5 |
AUD |
56.8 |
35.0 |
| 21/12/2018 |
7 |
SEK |
30.0 |
2.9 |
| 27/12/2018 |
12 |
EUR |
80.0 |
80.0 |
BREAKDOWN OF THE
PORTFOLIO
As of 31 December 2018, the breakdown of the green portfolio is as follows. It
is
well diversified, both geographically and sectorially, in line with Crédit Agricole
CIB's conviction that the transition to a greener economy will involve numerous industrial
sectors, around the world.
► Breakdown by
region
► Breakdown by
sector
4.2 ADVISING OUR
CUSTOMERS ON SOCIAL AND ENVIRONMENTAL PROJECTS
Since 2010, the Sustainable Banking team has been supporting customers with social
or environmental projects in line with the four areas of excellence selected by Crédit
Agricole Group: farming and food production, housing, health and the ageing population
and the energy and environment economy.
Crédit Agricole CIB helped a customer set up an investment fund dedicated to developing
renewable energy infrastructures in emerging countries. This investment fund generates
a medium to long term return by encouraging private investors to support a portfolio
of renewable energy development projects and offers different investment tranches
with varying risk/return profiles. Crédit Agricole CIB was involved in all stages
of the project, from design to putting investors into contact with the project owners.
As access to energy facilitates economic activity and improves living conditions,
this project has a positive impact on the economic development of the regions involved.
Crédit Agricole CIB has thus supported, during the course of 2018, some of its
customers
in the financing of their environmental and/ or social projects thanks to a new offer
of dedicated loans, Green Loans and ESG-Indexed Loans. Green Loans are loans used
to finance environmental projects based on the same principles as Green Bonds. Given
that Crédit Agricole CIB was involved in the governance of Green Bonds and the drafting
of Green Bond Principles, the Bank participated in the launch of the Green Loan Principles
of the Loan Market Association which state the principles for structuring this new
type of operation:
| ― |
use of the funds;
|
| ― |
project assessment and selection;
|
| ― |
funds monitoring;
|
| ― |
reporting.
|
Crédit Agricole CIB has also developed ESG-Indexed Loans which are loans whose
margin
is indexed on the ESG (Environmental, Social and Governance) performance of the issuer.
4.3 PROMOTING
SOCIALLY RESPONSIBLE INVESTMENT (SRI) IN WEALTH MANAGEMENT
SRI seeks to reconcile an investment's economic performance with its social and
environmental
impact by providing financing to companies and public sector entities that contribute
to sustainable development, regardless of the economic sector. By influencing the
governance and behaviour of market participants, SRI promotes a responsible economy.
This responsible development concept has been extended to product marketing and
social
policy.
Indosuez Wealth (Group) has drawn up a precise action plan according to the following
principles:
| ― |
rollout of customer portfolio SRI ratings to all entities;
|
| ― |
raising awareness amongst marketing professionals and customers
about the SRI rating
of portfolios;
|
| ― |
creating a "Carbon Impact" rating;
|
| ― |
selecting thematic funds (low carbon, energy transition, etc.);
|
| ― |
offering Green Bonds.
|
4.4 ASSESSING
AND MANAGING THE RISKS ARISING FROM THE ENVIRONMENTAL AND SOCIAL IMPACTS
OF OUR FINANCING
Crédit Agricole CIB has developed a system to assess and manage the risks arising
from the environmental and social impacts relating to both transactions and customers,
by factoring in the main sustainable development issues, i.e. combating climate change,
biodiversity protection and respect for human rights.
Consideration
of sustainable development issues
CLIMATE CHANGE
Please refer to Section 3: "Incorporating climate change issues" for details of
how
this issue is factored in.
BIODIVERSITY PROTECTION
Since it exercises a services activity and is located in urban environments, the
Bank
does not have a significant direct impact on biodiversity.
However, the activities it finances may in some cases affect biodiversity. In its
CSR sectoral policies, Crédit Agricole CIB therefore introduced analytical and exclusionary
criteria based on biodiversity protection, with particular attention paid to important
areas based on this criterion. Critical adverse impacts on the most sensitive protected
areas, such as and wetlands covered by the Ramsar Convention, constitute exclusionary
criteria under these policies, for example.
Since 2016, Crédit Agricole CIB has been mapping the sectors and geographical regions
which are most exposed to water access and pollution issues. Crédit Agricole CIB has
included this new criteria of analysis in its CSR scoring system described below.
OTHER ACTIONS
TO PROMOTE HUMAN RIGHTS
Crédit Agricole CIB fully endorses the values of the United Nations Global Compact,
of which Crédit Agricole is a signatory. This particularly concerns human rights and
labour standards. Crédit Agricole S.A. has signed several specific charters in addition
to these general principles, including the Diversity Charter in 2008, the Human Rights
Charter in 2009 and the Responsible Purchasing Charter in 2010. Actions concerning
employees are covered in " Developing people and the social ecosystem" and those concerning
sub-contractors and suppliers are discussed in " Promoting an ethical culture".
As with climate and biodiversity matters, however, the indirect impacts involving
the financed activities appear as most significant. They are assessed and managed
as shown below. The Bank's CSR sector policies refer specifically to the International
Labour Organisation (ILO) fundamental conventions, and the International Finance Corporation
(IFC) performance standards.
Since 2016, Crédit Agricole CIB maps the sectors and geographical regions which
are
most exposed to risks of human rights violations in both their own operations and
within their supply chains. Crédit Agricole CIB has included this new criteria of
analysis in its CSR scoring system described below.
In 2018 Crédit Agricole CIB actively participated in the review of the Equator
Principles
(a continuation of work started in 2017) and presented recommendations to the General
Meeting of the Equator Principles Association in October 2018.
Assessing and
managing the risks arising from the environmental and social impacts
of financing
The environmental and social impacts resulting from the financing activity appear
to be substantially greater than the Bank's direct environmental footprint. Taking
these indirect impacts into account is one of the main sustainable development challenges
for Crédit Agricole CIB. The system which manages these environmental and social business
risks is based on three pillars:
| ― |
applying the Equator Principles to transactions which are directly
related to a project;
|
| ― |
CSR sector policies;
|
| ― |
assessment of the environmental and social aspects of the transactions.
|
From 2013, Crédit Agricole CIB also introduced a scoring system for all its corporate
clients.
Environmental and social risks are first assessed and managed by the account manager.
Account managers are backed by a network of local correspondents, who provide the
necessary support in each regional Project Finance structuring centre and remain in
constant communication with a coordination unit. It comprises operating staff from
the Project Finance business line and coordinates the practical aspects of the implementation
of the Equator Principles. It manages the network of local correspondents and implements
specialised training for participants.
Group Economic Research (ECO) is an integral part of Crédit Agricole S.A. and provides
additional support and clarification for all types of transactions and customers by
contributing its expertise on environmental and technical issues, thereby making it
possible to finetune the analysis and identify the risks for each business sector.
Even though its corporate client base comprises mostly SMEs, Wealth Management
integrates
environmental and social components into its risk analysis based on the sector policies
defined by Crédit Agricole CIB and the Group. The compliance risk grid for credit
transactions covers these issues, supported by a special opinion if necessary.
The Equator Principles
The Equator Principles were developed in response to limitations and triggers related
to project financing, as defined by the Basel Committee on Banking Supervision. Although
they cannot always be applied in their current state to other types of financing,
they nevertheless represent a useful and globally recognised methodological framework
for recognising and preventing environmental and social impacts in cases where the
financing appears to be linked to the construction of a specific industrial asset
(plant, transport infrastructure, etc.).
The implementation of the Equator Principles is described in detail on the Bank's
website.
Statistics
18 finance packages for projects (1) were signed in 2018 and were ranked
into category A, B and C of the International
Finance Corporation. At 31 December 2018, 406 projects in the portfolio had been ranked.
The classification of projects breaks down as follows:
| ― |
37 projects classified as A, 6 of them in 2018;
|
| ― |
313 were classified as B, 12 of them in 2018;
|
| ― |
and 56 projects classified as C, none of them in 2018.
|
The 2018 breakdown by sector and region is as follows:
|
|
Category A |
Category B |
Category C |
| Total |
6 |
12 |
|
| Sector |
|
|
|
| Mining |
2 |
|
|
| Infrastructure |
|
2 |
|
| Oil & Gas |
3 |
3 |
|
| Energy |
1 |
7 |
|
| Of which renewable energies |
1 |
2 |
|
| Other |
|
|
|
| Region |
|
|
|
| North America |
2 |
2 |
|
| Latin America |
1 |
1 |
|
| Asia & Pacific |
1 |
3 |
|
| Europe |
2 |
5 |
|
| Middle East & Africa |
|
1 |
|
| Country designation |
|
|
|
| Designated |
3 |
9 |
|
| Non-Designated |
3 |
3 |
|
| Independent review |
|
|
|
| Yes |
6 |
12 |
|
| No |
|
|
|
N.B.: Countries classified as Designated are high-income OECD countries as per
the
World Bank indicators. Independent Review means that the environmental and social
information has been reviewed by a consultant not related to the customer.
(1)
in accordance with the agreement entered into by the Equator Principles Association
(project closed).
At 31 December 2018, there were 21 Project-Related Corporate Loans (PRCL) in the
portfolio.
Three PRCLs were signed (1) in 2018 and ranked as category A, B or C, as
follows:
| ― |
2 projects classified as A;
|
| ― |
1 project classified as B;
|
| ― |
No projects were classified as C.
|
The sector-specific and geographic distributions are as follows:
|
|
Category A |
Category B |
Category C |
| Total |
2 |
1 |
|
| Sector |
|
|
|
| Mining |
|
|
|
| Infrastructures |
|
|
|
| Oil & Gas |
1 |
|
|
| Energy |
|
1 |
|
| Other |
1 |
|
|
| Region |
|
|
|
| North America |
|
|
|
| Latin America |
|
|
|
| Asia & Pacific |
|
|
|
| Europe/Middle East/Africa |
2 |
1 |
|
| Country designation |
|
|
|
| Designated |
|
|
|
| Non-Designated |
2 |
1 |
|
| Independent review |
|
|
|
| Yes |
2 |
1 |
|
| No |
|
|
|
CSR sector policies
The CSR sector policies published by Crédit Agricole CIB explain the social and
environmental
criteria included in its financing policies. These criteria mainly reflect the issues
of concern to civil society that appear to be the most relevant for a corporate and
investment bank, particularly those relating to human rights, fighting climate change
and preserving biodiversity. The goal of the CSR sector policies is therefore to clarify
the non-financial principles and rules relating to financing and investments in the
corresponding sectors, in accordance with the Crédit Agricole S.A. Group policy.
The current sector policies and their implementation are described on the website.
Sensitivity analysis
Crédit Agricole CIB has been assessing the environmental and social impacts of
transactions
since 2009. They reflect either questions on managing environmental or social impacts
that are deemed critical, or controversy related to transactions or customers.
Customer CSR scoring
From 2013, Crédit Agricole CIB introduced a CSR scoring system for all corporate
clients
designed to complement its system for assessing and managing the environmental and
social risks of transactions. Clients are rated each year on a scale that includes
three levels (Advanced, Compliance and Sensitive), with these ratings based on:
| ― |
compliance with existing sector policies;
|
| ― |
existence of reputational risk for the Bank (Sensitive rating);
|
| ― |
customer's inclusion in leading global CSR indexes (Advanced
rating).
|
This scoring system is evolving following the service contract signed with a non-financial
rating agency. The tests conducted in 2016 and 2017 on the use of ratings from this
agency led to a CSR scoring system being introduced in 2018 with three due diligence
levels: light, standard and reinforced. These three levels of due diligence are described
on the Bank's website.
(1)
in accordance with the agreement entered into by the Equator Principles association
(project closed).
5. DEVELOPING
PEOPLE AND THE SOCIAL ECOSYSTEM
SOCIAL RESPONSIBILITY
Social indicators
METHODS
Each company of the Crédit Agricole S.A. Group has its own employee relations policy,
under the responsibility of a Human Resources Director. The overall consistency is
managed by the Human Resources Department of Crédit Agricole S.A. Group. Concerned
entities are those with employees that are consolidated within Crédit Agricole CIB.
Unless otherwise stated, the population in question is that of "active" employees.
Being "active" implies:
| ― |
a legal component in the form of a "standard" permanent or temporary
contract of employment
(or similar for foreign entities);
|
| ― |
being on the payroll and at work on the last day of the period
concerned;
|
| ― |
working hours of 50% fulltime equivalent (FTE) and higher.
|
The scope of the employees covered (as a percentage of "Fulltime Equivalent" or
FTE
at the end of the year) is presented for each table below.
KEY FIGURES
► Headcount by
business line: (in FTE: Full-time Equivalent)
► Headcount by
region
► Headcount by
type of contract (in FTE: Full-time equivalent)
|
|
2018 |
2017 |
|
|
France |
Outside France |
Total |
France |
Outside France |
Total |
| Permanent staff |
4,943 |
6,383 |
11,326 |
4,454 |
6,090 |
10,544 |
| Contractors |
46 |
172 |
218 |
45 |
112 |
157 |
| Total active staff |
4,989 |
6,555 |
11,544 |
4,499 |
6,202 |
10,701 |
| Permanent staff on extended leave of absence |
66 |
16 |
82 |
121 |
21 |
142 |
| Total |
5,055 |
6,571 |
11,626 |
4,620 |
6,223 |
10,843 |
► Breakdown of
permanent staff in France by gender
|
|
2018 |
2017 |
| In % |
Women |
Men |
Women |
Men |
| Staff in France |
46.8 |
53.2 |
46.4 |
53.6 |
| Business scope in France |
|
100% |
|
100% |
► Breakdown of
permanent staff in France by gender and category
|
|
2018 |
2017 |
| In % |
Managers |
Non-managers |
Managers |
Non-managers |
| Staff in France |
92.4 |
7.6 |
90.8 |
9.2 |
| Of which women (in %) |
87.7 |
12.3 |
84.8 |
15.2 |
| Of which men (in %) |
96.6 |
3.4 |
96.0 |
4.0 |
| Business scope in France |
|
100% |
|
100% |
► Age structure
at 31 December 2018
► Breakdown by
age
|
|
2018 |
2017 |
|
|
France |
Outside France |
Total |
France |
Outside France |
Total |
| Average age |
43 years and 1 month |
43 years and 2 months |
43 years and 2 months |
42 years and 5 months |
42 years and 10 months |
42 years and 7 months |
The average age of Crédit Agricole CIB Group employees is 43 years and 2 months
old,
43 years and 1 month old for France and 43 years and 2 months old for the international
business.
► Forecasts of
employees reaching the age of 65 in France over the next 10 years
|
|
2018 |
|
|
Number |
% |
| 65 years old in "n" |
19 |
0.4 |
| 65 years old in "n"+1 |
13 |
0.3 |
| 65 years old in "n"+2 |
21 |
0.4 |
| 65 years old in "n"+3 |
32 |
0.6 |
| 65 years old in "n"+4 |
66 |
1.3 |
| 65 years old in "n"+5 |
88 |
1.7 |
| 65 years old in "n"+6 |
97 |
1.9 |
| 65 years old in "n"+7 |
119 |
2.3 |
| 65 years old in "n"+8 |
113 |
2.2 |
| 65 years old in "n"+9 |
100 |
2.0 |
| 65 years old in "n"+10 |
128 |
2.5 |
| Total |
796 |
15.7 |
► Promotions in
France
|
|
2018 |
2017 |
|
|
Women |
Men |
Total |
Women |
Men |
Total |
| Promotion in the non-manager category |
14 |
7 |
21 |
11 |
4 |
15 |
| Promotion from non-manager to Manager |
44 |
14 |
58 |
34 |
14 |
48 |
| Promotion in the manager category |
124 |
171 |
295 |
97 |
162 |
259 |
| Total |
182 |
192 |
374 |
142 |
180 |
322 |
| % |
48.7 |
51.3 |
100.0 |
44.1 |
55.9 |
100.0 |
| Business scope in France |
|
|
99% |
|
|
99% |
► Number of permanent
staff recruited by geographical region
|
|
Number of permanent
staff recruit(1) |
2018 |
2017 |
| In number |
Wealth Management |
CIB |
Total |
Total |
| France |
33 |
354 |
387 |
375 |
| Western Europe |
261 |
145 |
406 |
410 |
| Central & Eastern Europe |
|
21 |
21 |
7 |
| Africa |
|
8 |
8 |
3 |
| Asia & Pacific |
80 |
236 |
316 |
252 |
| Middle East |
|
9 |
9 |
5 |
| Americas |
17 |
106 |
123 |
98 |
| Total 2018 |
391 |
879 |
1,270 |
|
| Total 2017 |
333 |
817 |
|
1,150 |
| Business scope |
|
|
100% |
100% |
(1)
Including trainees, work-study trainees and contractors recruited as permanent staff.
► Proportion of
part-time staff
|
|
2018 |
2017 |
|
|
Managers |
Non-managers |
Total |
Managers |
Non-managers |
Total |
| Part-time staff |
396 |
93 |
489 |
352 |
96 |
448 |
| Part-time staff as % of total |
8.5 |
24.2 |
9.7 |
8.5 |
22.9 |
9.8 |
| Women as % of part-time staff |
|
|
90.8 |
|
|
91.1 |
| Business scope in France |
|
|
100% |
|
|
99% |
PRIORITY 1: ENCOURAGING
AND PROMOTING EMPLOYEE DEVELOPMENT AND EMPLOYABILITY
The human resources policy of the Group and Crédit Agricole CIB is to ensure that
each position in the organisation is held by a motivated employee whose skills and
performance meet the requirements and challenges of his or her position, but also
to prepare for the future. Thus, Crédit Agricole CIB deploys a policy of career management
to enable each employee, regardless of its level in the organisation, to expand its
professional experience in a constructive manner, but also to develop skills that
will be necessary in the future.
This approach is harmonised and globally shared to reflect the international nature
of Crédit Agricole CIB's operations and its corporate culture.
Employee induction
and integration
In 2016, Crédit Agricole CIB rolled out its Crédit Agricole CIB Global Induction
Programme,
to help new employees integrate into the Company. The programme introduces them to
the different Crédit Agricole CIB business lines and the Bank's culture.
The Crédit Agricole CIB intranet has a dedicated area wherein a large number of
documents
aiding in the integration process are available. Digital resources are also available
on the Bank's international training portal, HRE-Learning. An individual programme
of mandatory training courses is in place to develop and promote the compliance and
risks culture, helping new employees to adopt the correct conduct expected of them
in regulatory matters. This step is vital to limit the Bank's risk exposure. Depending
on the business line, new employees may also follow additional training courses linked
to their activity. Optional modules are also available on the portal to help them
successfully take up their new position. During their first year within the Bank,
new arrivals are also invited to take part in an induction event to gain a better
understanding of the interaction between the Bank's different business lines and to
meet their peers who have recently joined Crédit Agricole CIB teams. In 2018, two
editions were organised: one in Paris for 250 employees in France and one in New York
for 90 new-comers in the Americas region. Since its inception in 2016, more than 1,200
participants have taken part in this integration event.
Depending on their location and business line, new hires may also be required to
participate
in specific integration programmes. As part of its digitisation policy, in 2018 Crédit
Agricole CIB deployed a new onboarding procedure giving employees access to their
digital HR documents from both personal and professional equipment. And in order to
facilitate the search for information, the new HR intranet in France has a chatbot
which answers questions on leave and absences.
Developing and
promoting the employees through a professional career path put together
jointly by the employee, his or her manager and human resources manager
REINFORCING THE
ROLE OF THE ANNUAL ASSESSMENT IN THE EMPLOYEES' CAREER MANAGEMENT
Each year, the appraisal and objectives meetings provide an opportunity to take
stock
of individual and collective performance and the employees' achievements and development
needs.
In 2018, in order to strengthen employee commitment to the Crédit Agricole CIB
Code
of Conduct, its 7 principles were included amonst the skills assessed for all employees,
in France and abroad. In France, following the example of other entities of the Group,
Crédit Agricole CIB used a professional interview form in which employees and managers
must address wishes in the area of mobility and training. There are now three distinct
forms to be completed: assessment, professional interview and target-setting. Within
the framework of this worldwide campaign in 2018, 99% of the annual assessments between
employees and managers have been realised.
Two other systems complete these campaigns at Crédit Agricole CIB:
| ― |
the Cross Feedback tool, an effective assessment tool for the
most cross functional
positions by providing objective feedback from the people with whom the employee is
in daily contact. This tool helps to promote better cooperation between the Bank's
teams and to develop a culture based on feedback. This is a constructive approach
which focuses on the work of an employee during the past year. In 2018, 1,311 employees
received individual Cross Feedback;
|
| ― |
the 360° questionnaire, an evaluation tool for senior executives,
allows the members
of the Management Committee and their N-1 to be appraised by their N+1, their peers
and their N-1.
|
ENCOURAGING EMPLOYEES
TO TAKE CONTROL OF THEIR TRAINING
Crédit Agricole CIB employs an active training policy to meet its current and future
strategic challenges. The Bank encourages all employees to continuously adapt their
skills to the fast and complex changes in the economic, regulatory and technological
environment.
The HRE-Learning global training portal, launched in 2016 and accessible to all
employees
throughout the year, currently offers over 900 digital modules. This portal encourages
employees to take ownership of their training and represents a veritable invitation
to curiosity. In order to promote this digital training offer, in May 2018 Crédit
Agricole CIB organised its 1 st Learning Week in France. Almost 1,000 employees
came to meet the training teams and
participated in fun presentations of the portal: a quiz, a 7-minute digital stop-over
and personal advice. In the wake of this success, this event was deployed in other
locations. 120 employees participated in Hong Kong in July and 70 in London in October.
This digital training, focusing on vital business skills and the knowledge expected
of employees, is offered in addition to the classroom sessions also offered.
This approach targets the following objectives, as part of the forward planning
of
employment and skills:
| ― |
meet the needs and challenges of the business lines in order
to develop the skills
of their employees;
|
| ― |
meet the Bank's regulatory and safety requirements;
|
| ― |
support retraining and transfers through dedicated training plans;
|
| ― |
implement the training and awareness raising measures required
under the various agreements
signed;
|
| ― |
use available new technologies and educational methods to promote
access to training;
|
| ― |
incorporate training reform into the Crédit Agricole CIB training
policy.
|
► Training policy
|
|
2018 (12 months) |
2017 (11 months)(1) |
| Number of employees trained |
|
|
| France |
5,143 |
4,825 |
| International |
7,232 |
5,560 |
| Total |
12,375 |
10,385 |
| Business scope |
94% |
98% |
| Number of training hours |
|
|
| France |
114,634 |
87,521 |
| International |
128,610 |
105,807 |
| Total |
243,244 |
193,328 |
| Business scope |
94% |
98% |
(1)
December is not a representative month.
► Training themes
| Number of hours |
2018 (12 months) |
2017 (11 months)(1) |
| Themes |
Total |
% |
Of which France |
Of which international |
Total |
% |
| Knowledge of Crédit Agricole S.A. |
4,395 |
1.8 |
1,073 |
3,322 |
5,381 |
2.8 |
| Personnel and business management |
16,705 |
6.9 |
10,406 |
6,299 |
11,310 |
5.9 |
| Banking, law, economics |
32,306 |
13.3 |
13,352 |
18,954 |
20,691 |
10.7 |
| Insurance |
158 |
0.1 |
0 |
158 |
668 |
0.3 |
| Financial management (accounting, tax, etc.) |
17,962 |
7.4 |
8,318 |
9,644 |
15,857 |
8.2 |
| Risks |
10,891 |
4.5 |
8,542 |
2,349 |
6,640 |
3.4 |
| Compliance |
40,522 |
16.7 |
9,498 |
31,024 |
29,019 |
15.0 |
| Method, organisation and quality |
9,743 |
4.0 |
7,787 |
1,956 |
5,273 |
2.7 |
| Purchasing, Marketing, Distribution |
2,293 |
0.8 |
1,419 |
874 |
2,213 |
1.2 |
| IT, Networks, Telecommunications |
7,582 |
3.1 |
4,080 |
3,502 |
7,600 |
3.9 |
| Foreign languages |
43,505 |
17.9 |
10,993 |
32,512 |
54,462 |
28.2 |
| Office systems, business-specific software, new technology |
7,279 |
3.0 |
3,385 |
3,894 |
7,216 |
3.7 |
| Personal development and communication |
38,261 |
15.7 |
28,301 |
9,960 |
20,769 |
10.7 |
| Health and safety |
8,485 |
3.5 |
6,625 |
1,860 |
3,656 |
1.9 |
| Human rights and the environment |
949 |
0.4 |
69 |
880 |
725 |
0.4 |
| Human resources |
2,208 |
0.9 |
786 |
1,422 |
1,848 |
1.0 |
| Total |
243,244 |
100.0 |
114,634 |
128,610 |
193,328 |
100.0 |
| Business scope in France |
94% |
98% |
(1)
December is not a representative month.
The most common training areas within the Crédit Agricole CIB Group:
| ― |
Language training takes first place with 17.9% of the training
plan hours;
|
| ― |
Compliance training is second with 16.7% of the hours;
|
| ― |
Personal development and communication training are third place
with 15.7% of the
plan.
|
ENCOURAGING INTERNAL
MOBILITY TO ENHANCE CAREER PROSPECTS FOR EMPLOYEES
Crédit Agricole CIB encourages internal mobility to allow all of its employees
to
progress within the Bank and the Crédit Agricole Group. Internal mobility is favoured
over external recruitment.
My Jobs is a dedicated internal mobility portal which is available to Crédit Agricole
CIB in France and worldwide. It lists all of the job vacancies in corporate and investment
banking and the Crédit Agricole S.A. Group. In addition, Crédit Agricole CIB uses
different systems to support employees in their mobility approaches: mobility committees,
events and workshops, individual support and digital pathways. These initiatives also
create a more cross disciplinary approach and develop the mobility culture.
Thus, in October 2018 Crédit Agricole CIB offered its employees in France a Mobility
Week. This event centred on a conference and workshops on self-knowledge and talks
by stands with HR and business line operational staff. During the week mobility support
tools were presented to over 500 employees who benefited from customised advice on
their professional plans and CV. In addition, the Déclic Mobilité programme, launched
in 2017 with a consultancy specialising in professional support, continued in 2018
offering 55 employees the opportunity to discuss their mobility plans and to get them
underway. The system combines an individual interview with group sessions encouraging
people to share their experiences.
Finally, in November 2018 Crédit Agricole CIB deployed a digital pathway created
in
partnership with the start-up Jobmaker. This 7-stage procedure suggests work to do
and video advice. Its flexible format allows employees to progress at their own pace
as they reflect on and build their professional plans. At the end of this course,
the employee can share the summary of their thoughts with their HR manager during
a dedicated interview.
IDENTIFYING AND
DEVELOPING TALENTS
At Crédit Agricole CIB, the members of the Management Committee, managers and Human
Resources have been working to identify and manage talent for several years now.
Part of the Crédit Agricole S.A. Group policy, it aims to retain and develop the
capabilities
of employees with potential and to ensure succession plans for strategic positions
at the Bank.
Since 2015, Crédit Agricole CIB's Talent Management policy has been structured
around
three categories based on identification criteria approved by Executive Management:
Rising Talents, Advanced Talents and Future Leaders. Each year, the executive committees
of the business lines work with Human Resources to review the talent lists worldwide.
Diversity is a particularly important factor in this review.
The Bank's talents are offered special development opportunities which combine
Groupwide
programmes and specific Crédit Agricole CIB programmes.
In 2018, 65 Rising Talents took part in the fourth My Way programme in France and
worldwide. This programme brings together the employee, his or her manager and HR
manager to discuss the employee's development plan and career path.
Indosuez Wealth Management also offered the My Way programme to 22 Rising Talents
from its different locations.
A new leadership development programme, the Global Development Programme, was rolled
out at Crédit Agricole CIB in 2018. About a hundred employees from 15 countries met
in Paris for two days of training on leadership with internationally-renowned speakers.
This programme also aimed to encourage networking between participants.
Crédit Agricole CIB has also launched a new format for its Strategic Leadership
programme
aimed at employees who are members of Cercle 2. This training is structured in 3 one-day
modules: "Authentic Leadership", "Coaching master-class" and "5 conversations". In
total, 33 managers participated in the programme this year.
Promoting and
managing employees with respect and responsibility
In a complex and constantly changing environment, it is vital that the Crédit Agricole
CIB strategy is properly disseminated. The managers play a key role in implementing
the strategy at all levels of the Bank, mobilising the teams and developing the skills
of their employees. Since 2012, Crédit Agricole CIB has therefore deployed the Management
Academy, a training programme for all managers in France and worldwide, which aims
to develop a shared managerial culture. Since 2017, a new concept of the Management
Academy, structured around three levels of expertise, has been proposed to the managers
of Crédit Agricole CIB. The first level, Novice Learner is open to all employees who
then have free access to digital modules on managerial topics via the Bank's international
training portal. The second and third levels, Expert Learners and Master Learners,
combine digital and classroom training modules focused on four skill sets: relational
intelligence, mobilising people, implementing strategy and steering action. These
levels are addressed respectively to new managers, operational managers, experienced
managers and senior managers. In France in 2018, 55 sessions were held and over 450
managers attended a Management Academy training session. Similar sessions have also
been rolled out at Crédit Agricole CIB's main locations abroad.
PRIORITY 2: GUARANTEEING
EQUALITY AND PROMOTING DIVERSITY
As a committed and responsible employer, Crédit Agricole CIB wants its organisation
to reflect the rich diversity of society and therefore makes every effort to treat
every employee fairly.
To ensure its employees are properly equipped to understand diversity issues, Crédit
Agricole CIB set up a Diversity Academy, open to all in France and worldwide, on its
HRE-Learning training portal. The Diversity Academy develops employees' openness,
listening skills, self-awareness and awareness of others through digital modules on
topics such as interculturality, gender and disability. Crédit Agricole CIB also holds
mandatory training courses in some of its locations to promote diversity and prevent
discrimination, such as in Germany and India.
Gender equality
at work
PROPORTION OF
WOMEN
|
|
2018 |
2017 |
| In % |
% |
Business scope |
% |
Business scope |
| Among all employees |
43.8 |
100% |
43.6 |
100% |
| Among permanent contract staff |
42.1 |
100% |
38.4 |
100% |
| Of the Executive Committee of CACIB |
4 of 6 |
100% |
5 of 18 |
100% |
| Of management levels 1 and 2 * of CACIB
|
18.1 |
100% |
18.5 |
100% |
| Of the top 10% highest-earning employees in each subsidiary
(fixed compensation) |
19.3 |
98% |
19.6 |
98% |
*
The managerial levels group the members of the executive committees and the members
of the management committees at each entity into two levels.
DEVELOPING GENDER
EQUALITY AT WORK
Convinced that diversity is the key to promoting performance and innovation, for
several
years now the Bank has been implementing a proactive diversity policy. In order to
identify the main issues and measure the effectiveness of its actions, Crédit Agricole
CIB monitors gender distribution indicators throughout the year. Following the steps
taken by the Bank's Management Committee, which met in July 2016 during a special
seminar dedicated to diversity and performance issues, in 2017 the members of Crédit
Agricole CIB's Executive Committee set a number of diversity related goals to be met
between now and the end of 2019 within their respective business lines.
As part of its career management and diversity policy, in September 2018 the Bank
launched the 2 nd edition of its global mentoring programme in France and
worldwide. This aims to support
44 employees, the mentees, identified by the business lines, in their professional
development and to help them to become more visible. This programme allows mentees
to exchange and benefit from the experience of mentors, members of the Executive Committees
and Business Line Management Committees, in a confidential and caring environment.
This year, the programme became more international with 20 mentor-metee duos from
outside France compared with 10 in 2017. A digital training and a classroom workshop
were offered in France to support the mentors. In 2019, participants selected will
be asked to share their feedback in mid-programme workshops.
Indosuez Wealth Management for its part has set up a mentoring system for women.
7
female employees were supported in their development by members of the Management
Committee in 2018. Crédit Agricole CIB also supports the networks to promote diversity,
created by female employees, such as CWEEN launched in 2008 in India, Potentielles
in France, Crédit Agricole CIB Women's Network (CWN) in New York in 2010, SPRING in
London in 2015, RISE in Hong Kong in 2016, WING in Tokyo in 2017, CARE in South Korea,
MORE in Taiwan and Gulf Women's Network launched in Dubai in 2018. This year has also
seen diversity networks launch voluntary mentoring initiatives.
Crédit Agricole CIB also implements at its various locations leadership programmes
for its female employees. In 2018, 60 women took part in the "Leadership au feminin"
[Women Leadership Programme] training in France. Worldwide, the 2 nd edition
of the Women Leadership Programme, which took place over two days, brought
together in London and Paris 12 female employees from the EMEA region. A pilot session
for 15 women from the Asia-Pacific region also took place in July in Hong Kong. The
Eve seminar, offering the opportunity to meet other attendees from other major groups
and share experiences, was offered to 8 Crédit Agricole CIB employees in France and
Asia.
Finally, as every year, Diversity Week was held in France and abroad. This event
allowed
employees to attend conferences and awareness workshops. The 2018 edition saw initiatives
proposed in Paris, New York, Hong Kong, Tokyo, Dubai, London, Frankfurt, Madrid and
Milan.
HELPING EMPLOYEES
FIND A BETTER WORK/LIFE BALANCE
To help its employees find a good work/life balance following the move the Bank
provided
support measures, such as moving grants, travel grants and new work organisation options,
mainly through a number of collective agreements.
The teleworking agreement signed in France in late 2015 has enabled Crédit Agricole
CIB to offer this new working practice. At 31 December 2018, almost 850 employees
were teleworking one day a week, even two days in some cases.
An international roll-out of this initiative is also being considered. In London,
teleworking was implemented in 2018 and it will be implemented very soon in New York.
Indosuez Wealth Management has been offering teleworking since 2017 in France and
will soon extend the possibility to Switzerland, Luxembourg and Monaco.
As part of its policy to promote gender equality, Crédit Agricole CIB is also running
parenting initiatives in France and worldwide. In France in 2018 some 28 female employees
attended workshops on the topic of finding a balance between work and motherhood.
In Hong Kong, maternity leave increased from 12 to 16 weeks. Convinced that the donation
of rest days is deeply embedded in the Bank's values and social issues, Crédit Agricole
CIB has set up a system for donating rest days to colleagues. A collective agreement
was concluded in mid-2017, unanimously signed by the unions. While the legal scheme
is currently authorised only to provide care for a child who is seriously ill, Crédit
Agricole CIB plans to extend the donation of rest days to the employee's spouse or
partner in a civil partnership and also considers the situation of employees' dependent
parents or grandparents. In 2018, 41 days were allocated to employees under this programme
and the "Solidarity Days Bank" (for collecting donations) had 157 days available at
31 December.
In France, Crédit Agricole CIB also offers its employees, both in Paris and in
the
regions, 41 nursery places in partnership with the Babilou network of nurseries, and
30 nursery places in the Petits Chaperons Rouges nursery near the SQY Park campus.
All these nursery places are allocated according to social criteria.
Equality of backgrounds
and origins
YOUTH RECRUITMENT
POLICY
Crédit Agricole CIB has an active policy to promote the professional integration
of
young people in France and worldwide. This is reflected in the work placements at
its different locations and by the ongoing workstudy training offered in France.
In 2018, Crédit Agricole CIB welcomed 400 new interns and 180 new work-study trainees
in France, as well as 102 VIEs in its international subsidiaries.
All job offers are published on the Crédit Agricole CIB and Crédit Agricole Group
job sites. They are also published on specialist recruitment sites and on Job Teaser,
a recruitment platform in schools and universities. After having applied online, the
candidates for internships, work-study contracts, VIEs or permanent contracts for
young graduates must sit and pass online logic tests before being invited for interview.
In some of its locations, Crédit Agricole CIB offers students the possibility of
joining
the Bank through dedicated pathways which may involve internships lasting from 10
weeks to 2 years. This is the case for example in New York, Hong Kong and Frankfurt.
Through its internships, work-study placements and VIE positions, Crédit Agricole
CIB identifies the best potential employees. In 2018, almost 50% of the junior permanent
staff positions in France were filled by young people from this pool.
In addition, in accordance with Group policy, Crédit Agricole CIB participates
in
numerous activities promoting the diversity of the recruited profiles. In this context,
the Bank has renewed its partnership with Handiformafinance, initiated by the French
Management Association (AFG), which offers disabled people the chance to train for
back-office jobs in markets, whilst also studying for a degree from Université Paris
Ouest Nanterre in "Back & Middle Office Financial Asset Management". In May, Crédit
Agricole CIB was also present at the ESSEC Open Employment Forum to meet candidates
with disabilities.
EMPLOYEE INVOLVEMENT
IN SCHOOLS AND UNIVERSITIES IN FRANCE AND WORLDWIDE
The Bank ensures a strong presence in schools and universities to promote its business
lines and global network of expertise and to meet future employees. In 2018, more
than one hundred initiatives were deployed in France and internationally. Beyond the
forums, Crédit Agricole CIB holds more targeted events such as conferences, case studies,
after works and trading rooms visits. Close to 100 managers and employees join the
HR teams during these events to share their experience with students and to receive
applications for the various positions to be filled. In 2018, the Bank continued to
promote its employer brand abroad by stepping up its presence at schools and universities
in Europe, Asia and the United States.
The Bank is setting up educational partnerships both in France and worldwide. In
2018,
Crédit Agricole CIB continued its efforts to support the financial associations of
engineering and business schools as well as universities, particularly by financing
some of their events and projects.
► Trainees and
workstudy trainees in France
| Trainees and work-study trainees
in France (average monthly Full-Time Equivalent) |
2018 |
2017 |
| Work-study trainees |
262 |
234 |
| Trainees |
153 |
169 |
| % of scope covered |
100% |
100% |
Employment and
integration of people with disabilities
Since 2005, Crédit Agricole S.A. Group in France has been actively promoting the
employment
of people with disabilities through job retention and awareness initiatives and also
through recruitment from the sheltered and disability friendly sectors. The fifth
agreement, signed in January 2017, is a logical continuation of the efforts made over
the previous twelve years and covers all of the Group's entities.
To help retain employees with disabilities, Crédit Agricole CIB plans to adjust
workstations
and the working environment: ergonomics studies, specially adapted computer equipment
(screens, special software for employees with visual impairment), use of the Tadéo
telephone aid for hearing-impaired employees, introduction of working from home and
developing the use of sign language translation for conferences and training courses.
This individual support can also take the form of tailored training, psychological
monitoring, or coaching.
Preventative health and disability awareness events are organised throughout the
year.
They aim to inform employees about the different illnesses and to offer better support
for employees with disabilities. The theme of the Disability Employment Week, held
at the Bank's offices in France from 19 to 23 November 2018, was "Invisible Disability".
An awareness-raising leaflet on the theme was distributed and hearing tests were offered
to over 140 employees. Three collective intelligence and creativity workshops also
allowed 30 employees to come together to reflect on how to change how disability is
perceived.
In addition to its direct initiatives to raise awareness about the employment of
people
with disabilities, Crédit Agricole CIB delegates services to the sheltered and disability
friendly employment sector (''Entreprises Adaptées" and ''Établissements et Services
d'Aide par le Travail'') in particular for the maintenance of printers.
A compensation
policy based on equality
GENERAL PRINCIPLES
The wage policy is key to Crédit Agricole Group's strategic human resources management.
Crédit Agricole CIB's remuneration policy is based on principles of fairness, performance
incentives in line with risk management and the sharing of the Company's values. This
policy is deployed taking into account the economic, social and competitive context
of the markets in which the Bank operates, as well as applicable legal and regulatory
obligations.
Crédit Agricole CIB places a great importance on the principle of equal treatment
at work. Provisions can be made locally to reduce possible gender wage gaps, for example
as in France under the agreement on gender equality at work.
EMPLOYEE BENEFITS
As a responsible employee that cares about the well-being of its employees, Crédit
Agricole CIB promotes a large range of employee benefits worldwide. The Bank takes
particular care to ensure that its employee benefits are:
| ― |
ethical and reflect the Group's values;
|
| ― |
attractive and reasonable in terms of local practices in the
banking sector;
|
| ― |
appropriate for the targeted recipients.
|
The Bank contributes to the funding of health cover programmes in many countries
in
order to offer its employees access to health care. Crédit Agricole CIB also places
significant importance on protecting the families of employees who die or are absent
from work, and fully funds the schemes implemented by its entities.
Crédit Agricole CIB was a forerunner for retirement planning 2 in many countries
with
its employer assisted savings plan. In France, Spain, Italy, the United Kingdom and
the United States, this type of scheme has been in place for over 20 years.
Through its employee savings schemes, employees share in the Company's results
and
performance. Since 2016, the profit sharing agreement in France has incorporated the
Bank's CSR indicator, FReD, to take account of the joint commitment of the Company
and its employees to the success of the CSR policy. Worldwide, employees are regularly
offered the opportunity to share in capital increase operations. In 2018, this programme
covered 11 countries in which Crédit Agricole CIB is located.
Employees on international postings are granted special company benefits appropriate
for the particular country of origin/host country combination.
► Permanent staff
by age in the Crédit Agricole CIB Group
► Permanent staff
by length of service in the Crédit Agricole CIB Group
► Departures of
permanent staff by reason
|
|
2018 |
|
|
France |
International |
Total |
% |
| Resignation |
106 |
569 |
675 |
72.4 |
| Retirement and early retirement |
33 |
63 |
96 |
10.4 |
| Redundancy |
7 |
91 |
98 |
10.5 |
| Death |
2 |
4 |
6 |
0.6 |
| Other reasons |
37 |
20 |
57 |
6.1 |
| Total |
185 |
747 |
932 |
100.0 |
| Business scope |
|
|
|
100% |
|
|
2017 |
|
|
France |
International |
Total |
% |
| Resignation |
83 |
418 |
501 |
67.1 |
| Retirement and early retirement |
21 |
74 |
95 |
12.7 |
| Redundancy |
8 |
91 |
99 |
13.3 |
| Death |
0 |
4 |
4 |
0.5 |
| Other reasons |
30 |
18 |
48 |
6.4 |
| Total |
142 |
605 |
747 |
100.0 |
| Business scope |
|
|
|
100% |
► Collective variable
compensation paid during the year on the basis of the previous
year's results in France
|
|
2018 |
2017 |
|
|
Total amount (in thousands
of euros)
|
Nombre de bénéficiaires |
Montant moyen (euros)
|
Total amount (in thousands
of euros)
|
Nombre de bénéficiaires |
Montant moyen (euros)
|
| Participation |
833 |
362 |
2,301 |
1,805 |
520 |
3,471 |
| Intéressement |
28,261 |
5,344 |
5,288 |
24,304 |
5,201 |
4,673 |
| Abondement |
13,367 |
5,359 |
2,494 |
11,984 |
4,837 |
2,478 |
| Total |
42,461 |
|
|
38,093 |
|
|
| Périmètre France couvert |
|
|
99% |
|
|
99% |
► Annual fixed
salary grid
► Average monthly
salary of permanent staff active in France (gross salary)
| In euros |
2018 |
2017 |
| Managers |
|
|
| Men |
6,620 |
6,467 |
| Women |
5,014 |
4,932 |
| Overall |
5,906 |
5,803 |
| Non-managers |
|
|
| Men |
2,829 |
2,816 |
| Women |
2,897 |
2,851 |
| Overall |
2,881 |
2,843 |
| Total |
|
|
| Men |
6,490 |
6,321 |
| Women |
4,753 |
4,615 |
| Overall |
5,676 |
5,530 |
| Business scope in France |
99% |
99% |
► Absenteeism
in France, in calendar days
|
|
2018 |
|
|
Managers |
Non-managers |
Total |
|
|
Women |
Men |
Women |
Men |
Number of days |
% |
| Illness |
15,203 |
10,071 |
3,149 |
1,449 |
29,872 |
40.7 |
| Accident in the workplace and during travel |
414 |
737 |
14 |
214 |
1,379 |
1.9 |
| Maternity/Paternity/Breastfeeding |
24,465 |
3,618 |
1,514 |
805 |
30,402 |
41.4 |
| Authorised leave |
4,612 |
2,472 |
900 |
485 |
8,469 |
11.5 |
| Other |
1,057 |
1,391 |
580 |
257 |
3,285 |
4.5 |
| Total |
45,751 |
18,289 |
6,157 |
3,210 |
73,407 |
100.0 |
| Business scope in France |
|
|
|
|
|
|
|
|
2018 |
2017 |
|
|
Average number of absence days
per employee |
Total |
Average number of absence days
per employee |
|
|
|
Number of days |
% |
|
| Illness |
6.0 |
25,140 |
43.1 |
5.6 |
| Accident in the workplace and during travel |
0.3 |
896 |
1.5 |
0.2 |
| Maternity/Paternity/Breastfeeding |
6.1 |
22,254 |
38.2 |
4.9 |
| Authorised leave |
1.7 |
8,184 |
14.0 |
1.8 |
| Other |
0.7 |
1,791 |
3.2 |
0.4 |
| Total |
14.8 |
58,265 |
100.0 |
12.9 |
| Business scope in France |
99% |
|
|
100% |
PRIORITY 3: IMPROVING
THE QUALITY OF LIFE IN THE WORKPLACE
Providing employees
with a working environment and working conditions that ensure
their health and safety
Crédit Agricole CIB considers quality of life in the workplace as a driver of fulfilment
and performance and as being essential to its effectiveness. The Bank provides employees
in France and abroad with training in stress prevention, including on its HRE-Learning
portal at the Management Academy and Diversity Academy. In France, any courses in
this area requested during appraisal sessions or at other times of the year by employees
and managers are systematically approved. In 2018, 134 employees took part in the
training on "Finding the balance between pressure and efficiency" and 85 managers
took part in the training on "Your and your employees' stress".
To fight against psychosocial risks, Crédit Agricole CIB provides an anonymous
and
confidential psychological support service to employees in France with a tollfree
number. Since 1 December 2018, the Bank has also been offering the services of Responsage,
an organisation which specialises in supporting family members who are carers, by
providing advice and guidance on all procedures related to the status of family-member
carer. Offered in the form of a confidential and free telephone platform, Responsage
helps more generally with all social issues that every employee may encounter in their
personal life. The employees may also share any observations they have with the Human
Resources Department, including their own HR manager. As part of the efforts to prevent
psychosocial risks, Crédit Agricole CIB encourages all those concerned within the
Company to play an active role and report any difficulties that might be encountered
by employees (senior management, managers, workplace health unit, social workers,
human resources, employee representatives and employees).
Throughout the year, Crédit Agricole CIB also holds events on health related issues
at its various locations: medical check-ups, training in first aid and the use of
a defibrillator, free of charge screening, vaccination campaigns, blood donations,
advice on ergonomics, nutrition workshops and relaxation sessions.
PRIORITY 4: PROMOTING
EMPLOYEE COMMITMENT AND SOCIAL DIALOGUE
The Group promotes dynamic and constructive social dialogue with its employees
and
their representatives. This commitment, which plays a vital role in the smooth running
of the Bank, can take several different forms: direct discussions, social surveys
and questionnaires, information disseminated continuously on Group events and its
strategy in France and worldwide, the use of collaborative tools and responsible social
dialogue.
The social climate within the Group is the result of an ongoing dialogue between
management,
employees and their representatives, when in place locally, while respecting the values
fostered by the Group.
Maintaining an
active and responsible social dialogue with employee representatives
Crédit Agricole CIB keeps a watchful eye on the deployment of a constructive social
dialogue, which facilitates the conclusion of a certain number of collective agreements
each year, carrying real commitments that reflect the Bank's social policy.
In 2018, social dialogue remained very dynamic in France, with evidence that both
Crédit Agricole CIB and employer and employee representatives are keen to negotiate
agreements capable of reconciling the Bank's interests with those of employees. Collective
agreements concluded in 2018 covered the following themes:
| ― |
wage agreements, incentive plans and employee savings schemes;
|
| ― |
agreement on the Time Savings Account in order to make access
to it more flexible
for employees;
|
| ― |
agreement to extend mandates in order to give management and
employer-employee representatives
the time needed to discuss the introduction of the single body, the Social and Economic
Committee, intended to replace, after the next professional elections in April 2019,
the Works Council, staff delegates and the Health, Safety and Working Conditions Committee;
|
| ― |
agreements relating to support for activity transfers as part
of projects involving
other entities of the Crédit Agricole Group (substitution agreement, method agreement
and transition agreements), with a view to involving all stakeholders in discussions
and to guarantee, globally, the rights of employees affected by these transactions.
|
This desire for dialogue with all stakeholders on structural projects was also
evident
in London where 9 staff representatives were elected and trained to lead a consultation
after Brexit. The dialogue involving these staff representatives, human resources
and the business lines is expected to continue once the consultation has concluded.
► Number of agreements
signed during the year in France by subject
|
|
2018 |
2017 |
| Salary and related |
5 |
4 |
| Training |
0 |
0 |
| Staff representation bodies |
1 |
0 |
| Employment |
2 |
0 |
| Working time |
6 |
0 |
| Diversity and professional equality |
0 |
0 |
| Other |
4 |
10 |
| Total |
18 |
14 |
| Business scope in France |
99% |
99% |
Disseminating
and sharing information with employees to enable debate and endorsement
Conference calls and management meetings are held regularly in France and simultaneously
broadcast abroad to enable managers to meet the members of Crédit Agricole CIB's Executive
Management. Some 1,000 executives are invited to these meetings and conference calls,
which are organised for every quarterly publication of results and throughout the
year for strategic topics. Participants are invited to ask questions in advance on
an anonymous basis, and Executive Management then answers them during its presentations.
A dedicated space, the "Managers' corner", on the Inside Live global intranet also
enables managers to find all of the information that they need to convey to their
teams.
Furthermore, conferences called "Inside Meetings" are regularly held for all employees
in France and cover a broad range of topics: strategy, news, company culture, sponsorship
actions, the challenges of sustainable development, etc. These events provide an opportunity
to learn more and to share information during the question and answer sessions at
the end of the presentations.
Encouraging schemes
to increase participation and self-expression by employees
In parallel to these regular occasions, a number of other activities encouraging
the
participation of employees were implemented at Crédit Agricole CIB in 2018.
Crédit Agricole CIB and Indosuez Wealth Management participated in the Crédit Agricole
Group's Commitment and Recommendation Index survey, sent to all their employees worldwide,
from 18 September to 9 October 2018. At Crédit Agricole CIB, this initiative fits
in with commitment surveys continued since 2015 and allows us to assess the positive
development of results. This year, the Crédit Agricole CIB Commitment and Recommendation
Index rose by one point over 2017, with 73% of favourable answers to the 21 questions
in the survey. The results of this survey will identify initiatives that, in line
with the nine global action plans developed in 2016, will further strengthen the Company's
commitment and performance.
6. PROMOTING THE
ECONOMIC, CULTURAL AND SOCIAL DEVELOPMENT OF THE HOST COUNTRY
6.1 DIRECT AND
INDIRECT IMPACTS
Crédit Agricole CIB's main economic and social impacts on local areas (both positive
and negative) are indirect, through its financing activity, and do not come directly
from its sites. Its business services do not therefore have a significant impact on
neighbouring and local populations.
Crédit Agricole CIB's indirect impacts reflect its role as a major financer of
the
global economy and major player in debt markets. The principles listed under the "General
environmental policy" heading are therefore intended to maximise the positive effects
and minimise the negative impacts of Crédit Agricole CIB's business by:
| ― |
implementing its system to assess and manage environmental or
social customer and
transaction related risks;
|
| ― |
promoting so-called "responsible" financing transactions, in
which issuers and investors
factor social and environmental considerations into their investment decisions.
|
Offering customers a diversified range of socially responsible investments is also
one of the objectives set by Wealth Management.
6.2 EMPLOYEES'
INVOLVEMENT IN SOLIDARITY INITIATIVES
Crédit Agricole CIB actively encourages the commitment of its employees to social
causes in the fields of social solidarity and inclusion. To this end, in 2018 the
Bank renewed its "Solidaires by Crédit Agricole CIB" programme.
"Coups de pouce"
["Giving a helping hand"] programmes
Through its "Coups de pouce" programmes, the Bank provides financial support for
charitable
projects to which employees are personally committed. The designated fields of activity
are social solidarity, social inclusion, the environment, education and health in
France and abroad. In 2018, the "Coups de pouce" supported 26 projects in France,
8 in the United Kingdom, 2 in Singapore and 1 in China. In total, since 2013, 247
charitable projects supported by employees have been supported by the Bank (including
74 outside France).
In 2018, the Works Council provided, on an exceptional basis, financial support
to
the programme. It asked employees to vote for one of the Jury's five favourite charitable
projects. The two projects which received the most votes (780 in total) received an
additional subsidy.
Volunteer work
with the bank's partner charities
During regular events or one-off assignments, employees shared some very rewarding
moments in the service of the cause of public interest. These experiences, organised
in a number of countries where Crédit Agricole CIB operates, give employees opportunities
to engage with and help charities to present their projects to other Bank employees.
In 2018, the events focused on various areas of activity: assisting charities working
in the fields of education or combating illness, activities to preserve the environment,
solidarity activities for the underprivileged (humanitarian, reconstruction, etc.)
and, in particular:
| ― |
in France, employees who gave their time to hold sporting events
such as the Financial
Community Telethon. The 2018 edition brought together 12 entities of the Crédit Agricole
S.A. Group who did sponsored runs or walks for the AFM-Téléthon; over 360 runners
and 40 volunteers from the Group joined forces for the Telethon during an evening
marked by effort and solidarity;
|
| ― |
for the first time in 2018, Crédit Agricole CIB, Crédit Agricole
S.A., CA Assurances
and CACEIS joined forces for "Giving Tuesday", a day dedicated to generosity, celebrating
giving in all its forms. Collections and sales of goodies for partner charities were
organised in ten or so campuses all over France;
|
| ― |
as part of the Solidaires programme, since 2015 Crédit Agricole
CIB Hong Kong has
provided support to the Enfants du Mekong NGO in various projects to train Cambodian
students in the professional environment (economics, time management, communication
and management). The Bank has expanded this partnership to offer Paris based employees
with the opportunity to go on a voluntary mission to Centre Christophe Mérieux in
Phnom Penh. After four years of training, the first chapter of the Crédit Agricole
CIB Hong Kong story in Cambodia has been concluded. In total 29 volunteers from Crédit
Agricole CIB Hong Kong travelled to Phnom Penh. Previously, almost 100 employees worked
for several months on the preparation of effective educational materials. Crédit Agricole
Hong Kong also gave its first training session in Cebu, in the Philippines, after
several months of training in which almost 30 Crédit Agricole CIB and Indosuez Wealth
Management employees participated;
|
| ― |
In the United Kingdom, as part of the partnership with Enfants
du Mekong, the Global
Markets Division (GMD) has set up a pilot scholarship programme in London extended
to two deserving students from Centre Christophe Mérieux to allow them to improve
their English language skills and discover the world of finance as part of "job shadowing"
with volunteer GMD employees;
|
| ― |
In the United States, in partnership with the New York Cares
Association, New York
employees donate their time, especially on two designated days, one of which is called
"New York Cares Day for Schools", when a school in the East Village in need of a helping
hand is spruced up; Crédit Agricole CIB New York also organised a Young Entrepreneurs
Workshop in collaboration with the EdeYouth charity. Employees helped young people
in foster families, group homes and single-parent families in all communities to acquire
practical skills through relevant training programmes with an emphasis on the development
of self awareness, self esteem and personal progress;
|
| ― |
In India, Crédit Agricole CIB supports Action Against Hunger
in the fight against
malnutrition in Mumbai. Here, employees from Crédit Agricole CIB Mumbai helped NGO
workers demonstrate the importance of sanitation and hygiene and to measure improvements
in the health of children from the slums. Specifically, they distributed wash kits
with booklets containing basic notions on cleanliness;
|
| ― |
following the earthquake and tsunami which hit the Indonesian
island of Sulawesi in
September 2018, Crédit Agricole CIB Asia-Pacific launched an internal fund-raising
campaign. The Bank committed to matching employees' donations. Given the urgency of
the situation and the huge needs on the ground, Crédit Agricole CIB Asia-Pacific decided
to go beyond this promise, contributing two dollars for every dollar donated by employees.
|
For Indosuez Wealth Management, 2018 was also very eventful:
| ― |
launch of the Solidarity@Indosuez programme in Europe which capitalises
on employees'
talents and know-how in several areas, particularly through the "Conge solidaire (r)
" [solidarity leave], with the support of the Planète Urgence charity. A pilot partnership
was concluded between Planète Urgence and the four European entities, supporting the
implementation of projects where people are in financially and socially vulnerable
situations, and projects relating to natural environments which are being destroyed
or which are under threat (improving adults' skills, social and educational support
for young people, and protection and appreciation of biodiversity);
|
| ― |
the 2018 edition of of the Citizen Days in Switzerland and Monaco,
volunteer programmes
in which employees give their time and skills to partner charities working in environmental
and social sectors, in lieu of a day's work. 26 projects were chosen in 2018 in which
over 200 employees from Indosuez Switzerland and Azqore collaborated. At CFM Indosuez,
95 participants, i.e. one quarter of employees, took turns throughout 2018 to bring
to life 16 projects created with the seven Monaco associations supported;
|
| ― |
CFM Indosuez employees collected almost €5,000 for the Children
& Future charity at
the No Finish Line 2018 (NFL) event which took place from 10 to 18 November, covering
over 3,000 kilometres, with the employer donating one euro for every kilometre covered.
Children & Future aims to promote children's rights worldwide, implementing or
supporting
projects which will improve their lives in the areas of health, education, hygiene
and nutrition;
|
| ― |
Indosuez Luxembourg employees collected toys for Wiltgen 4 Children,
benefiting vulnerable,
poor and disabled children. The beneficiary charities in 2018 were the Luxembourg
Red Cross, Du Pain pour Chaque Enfant, Fondation Pro Familia, Kannerschlass, SIPO,
Solidarité Jeunes, Stëmm vun der Strooss and TABA Walferdange. 8 m3 of toys were collected
in 2018, 20% more than in 2017;
|
| ― |
three hives were installed in the spring on the terrace roof
of the 6 th floor of Indosuez France in Paris. The presence of these 100,
000 bees on the roof
helps improve employees' awareness of the need to preserve this endangered species.
|
6.3 CULTURAL SPONSORSHIP
Crédit Agricole CIB France continues to actively pursue a policy of cultural sponsorship
supporting projects that encourage artistic creation, the discovery of the world's
cultures and the transmission of cultural heritage.
| ― |
In Paris, at the quai Branly-Jacques Chirac museum, the Bank,
which was awarded the
"Grand Mecene" [Grand Patron] status by the state in 2017, supported the "Hells and
Ghosts of Asia" exhibition.
|
| ― |
A sponsor of the Grand Palais, Crédit Agricole CIB supported
the "Artists and Robots"
exhibition. An internal competition was organised, with free tickets to the exhibition
for 150 employees.
|
| ― |
"Les Arts Florissants", the choir and orchestra directed by William
Christie, performed
at the Paris national Opera in Jephtha, an oratorio in three acts. This event was
organised on behalf of Crédit Agricole CIB, the sponsor, which was thus able to invite
its clients.
|
| ― |
This year the Abbaye aux Dames youth orchestra (JOA) launched
an appeal for finance
through Commeon, the crowd-funding platform specialising in sponsorship. Crédit Agricole
CIB matched the amount collected on the platform euro for euro. It was a complete
success, with the JOA meeting over 100% of its targets: these funds enabled the young
musicians to make an album of Haydn's works, directed by Raphael Pidoux, an internationally
renowned cellist. Following this, the youth orchestra performed at Le Beffroi de Montrouge
in a concert exclusively for the Bank's employees.
|
| ― |
The 2018/2019 season is special for the Paris National Opera
which in 2019 is celebrating
the 350 th anniversary of the creation of the Royal Academy of Music. It
is in this context
that Crédit Agricole CIB is forming a partnership with this institution. During this
anniversary year the Bank is particularly supporting two leading productions of the
2018/2019 season: La Dame aux Camélias, a ballet choreographed by John Neumeier and
La Traviata by Giuseppe Verdi, produced by Simon Stone. In order to mark this partnership,
200 invitations for a backstage visit to the Paris opera-house (masterclass, sessions,
dress rehearsals, etc.) were offered to employees. Private access arrangements also
enabled Crédit Agricole CIB to invite its clients during a performance of the ballet
La Dame aux Camélias. With a view to promoting French culture and excellence, the
Bank is supporting international tours by the Paris National Opera: two concerts of
the Opera's Academy have thus been produced in Beijing and Shanghai.
|
6.4 LINKS WITH
SCHOOLS AND SUPPORT FOR UNIVERSITY RESEARCH
| ― |
Crédit Agricole CIB ensures a strong presence in schools, particularly
through the
"Capitaines d'école" system led by Crédit Agricole S.A. (see the "Developing people
and the societal ecosystem" section in the social report).
|
| ― |
Since 2006, Crédit Agricole CIB has also been a partner of the
Chair of Quantitative
Finance and Sustainable Development at Paris Dauphine University and École Polytechnique.
This multidisciplinary project, supported from its inception by Crédit Agricole CIB,
is unique in that it brings together specialists in quantitative finance, mathematics
and sustainable development. One research area studied by this Chair since 2010 involves
the quantification of indirect impacts of the financing and investment activities,
particularly greenhouse gas emissions induced by the activities of the Bank's clients.
|
| ― |
One of the solid achievements of this research is the P9XCA methodology
referred to
previously. Crédit Agricole CIB has played an important role in disseminating this
work to other financial institutions. In 2014, the Bank took an active role in the
sector approach recommended by French organisations promoting corporate social responsibility
(ORSE, ADEME and ABC). This approach seeks to produce a practical guide listing the
methodologies and tools to help the various financial stakeholders (banks, insurance
companies, asset managers) assess their direct and indirect GHG emissions.
|
| ― |
A new PhD, overseen by the Chair, was undertaken in 2018 on the
subject of the climate
risks which could affect banks, particularly in relation to the assessment of scenarios
and country risk.
|
7. LIMITING OUR
DIRECT ENVIRONMENTAL FOOTPRINT
7.1 BUILDING MANAGEMENT
PROCESS AND THE CARBON FOOTPRINT
Certification
of buildings
In Île-de-France, 2/3 of employees work from the Montrouge campus and 1/3 on the
Saint-Quentin-en-Yvelines
campus. Following the transfer of several activities of Crédit Agricole S.A. to the
Crédit Agricole CIB group in 2018 (over 700 employees), Evergreen employees now occupy
4 buildings (Eole, Terra, Silvae, Aqua), with Eole housing over 3,000 employees. Employees
currently occupy four buildings on the Saint-Quentin-en-Yvelines campus (Provence,
Champagne, Languedoc, Alsace).
On the Montrouge campus, the buildings are certified "HQE Operation" and the company
restaurant achieved 3 rd place in the rankings of the CUBE 2020 competition
for efficient buildings, making
34% savings on CO2emissions compared with 2017. In Saint-Quentin-en-Yvelines,
the Champagne and Provence
buildings are certified as "BBC (low consumption building) Renovation". Outside France,
which covers almost 120 locations, Canada achieved BOMA certification and premises
in Belgium are Valideo-certified.
Reducing greenhouse
gas emissions in the fight against climate change
The Crédit Agricole Group's Medium-term 2020 Plan has set the objective of reducing
Greenhouse Gas (GHG) emissions by 15%, measured by the carbon totals at 2020 and covering
the 13 entities involved in the Group's FReD approach. Crédit Agricole CIB is therefore
logically part of this commitment. The baseline year selected was 2014. To achieve
the objective, the reductions include all items related to energy, transport, inputs,
and fixed assets.
The results of the carbon footprint assessment carried out at the end of 2014 at
the
head office and certain significant international entities were examined in 2017 to
propose areas for improvement in order to reach the goal as quickly as possible. The
approach committed to is part of a long term trend since, overall, total carbon emissions
in 2014 were down by about 16.7% compared with the assessment made in 2012.
In the 2014 financial year, the three most "energy intensive" items for a total
of
82.8% were business travel, energy and fixed assets, for 32%, 27.1% and 23.7% respectively.
2018 was an opportunity to focus attention, and indeed act, on these significant
items,
reducing the electricity consumption of buildings, reducing business travel (mainly
the use of air transport) or restructuring working time.
In addition to the quantitative actions chosen, regular actions to raise awareness
of both good day-to-day habits and better use of work tools should help to consolidate
the reduction objective. Indosuez Wealth Management supports the commitment to combat
global warming made by the Crédit Agricole group, which has put in place action plans
aimed at limiting greenhouse gas (GHG) emissions linked to both the operation of the
company (direct impacts) and business lines (indirect impacts). After various measures
to "de-carbon" investors' portfolios, develop green bonds and withdraw from the financing
of coal mines or coal-fired power stations, Indosuez Wealth Management entered a new
phase in the reduction of its direct emissions with the setting of a new objective.
It is within the framework of an action initiated in 2016 and measured in FReD that
Indosuez Wealth Management, in Monaco, France, Luxembourg and Switzerland, and in
collaboration with the other entities of the Crédit Agricole Group (FReD scope) worked
to reduce its GHG emissions.
Carbon balance sheets have been produced in order to detect the priority areas
for
action.
Assessment of
operational greenhouse gas emissions and offsetting
Lastly, Crédit Agricole CIB offset 23,770 tonnes of CO2equivalent by
cancelling Verified Carbon Units (VCU) certificates corresponding to
dividends received in 2018 in connection with its investment in the Livelihoods Fund.
This carbon investment fund provides investors with carbon credits, which have a major
social impact and help to promote biodiversity. The Fund also finances largescale
projects in the areas of reforestation, sustainable agriculture and clean energy generation.
These projects are implemented for and by deprived rural agricultural communities
in developing countries in Asia, Africa and Latin America.
The certificates received with respect to 2018 relate to five projects: mainly
Hifadhi
in Kenya (manufacture and distribution of stoves reducing the consumption of wood,
60,000 stoves distributed, 300,000 beneficiaries expected and 1,600,000 tonnes of
CO2saved over ten years), but also Tiipaalga in Burkina Faso (combating
desertification
and increasing food security by training women in the manufacture of stoves enabling
a reduction of up to 60% in the consumption of wood in a region threatened by desertification,
with ten year objectives of 30,000 families equipped with 150,000 beneficiaries and
689,000 tonnes of CO2prevented), ITYF in Peru (combating deforestation
and improving the health of 30,000
families in the Andes with 150,000 beneficiaries and a million tonnes of CO2avoided
in 14 years), VI Kenya (a sustainable milk cycle with 30,000 farmers on Mount
Elgon with the objective of doubling farmers' revenue whilst avoiding a million tonnes
of CO2) and finally Nature Environment & Wildlife Society (NEWS) in
India (16 million mangroves
in order to protect rural communities, 4,500 hectares restored, 250,000 beneficiaries
and 700,000 tonnes of CO2avoided over 20 years).
In 2018 CFM Indosuez Wealth Management implemented its ninth voluntary carbon compensation
campaign following the renewal of its carbon compensation contract which consists
of financing a project which helps prevent greenhouse gas emissions. This finance
is carried out through the purchase of carbon credits. Employees were invited to vote
for the project of their choice and the 62% participation rate reflects employee interest
in the issues and impacts of this transaction. The CLEAN WATER project aiming to provide
access to drinking water for local people in Malawi garnered the majority of votes.
7.2 POLLUTION
AND WASTE MANAGEMENT
Crédit Agricole CIB does not generate significant pollution directly. The Bank
nevertheless
devotes substantial effort to waste recycling. Several actions have been implemented
to reduce environmental impacts on the campuses of Montrouge and Saint-Quentin-en-Yvelines:
zero phytosanitary products, sorting and recycling of waste (paper/card, tins, plastic,
ordinary industrial waste and maintenance waste), eco-products for interior maintenance,
and limitation of food waste (display, self-service for fruit and vegetables). Actions
to raise awareness amongst employees are also regularly organised (energy saving,
waste management).
On a worldwide scale, data collection on recycling could still be improved. |In
addition,
action plans have been implemented in the various Crédit Agricole CIB entities, particularly
in Europe and Asia.
The Indosuez Wealth Management Group is also determined to reduce its direct impact
on the environment and continues to take action to raise the awareness of its employees
of eco-friendly behaviour and the implementation of resource management activities
and recycling (paper, ink cartridges, batteries, computer equipment). In addition,
Indosuez Wealth Management in Luxembourg has also chosen to strengthen the "Green
IT" policy by including energy performance criteria in the choice of computer equipment.
This process will be incorporated into the purchasing procedure, and may be extended
to other places.
7.3 SUSTAINABLE
USE OF RESOURCES
Energy
The indicators relate to consumption of electricity and gas.
| Energy |
Electricity |
Gas |
| Consumption (kWh) |
97,033,395 |
15,218,888 |
| % change y-o-y |
+ 17.5% |
+ 29% |
| Surface area (m 2)
|
310,695 |
153,517 |
| Ratio (kWh/m 2 /year)
|
312 |
99 |
| % change y-o-y |
+ 21.7% |
+ 40% |
NB: Given the significant changes in the scope reported this year as compared to
the
previous year (year in which Crédit Agricole CIB relocated to the Paris region) any
analysis of the variances in consumption is meaningless.
ELECTRICITY
Crédit Agricole CIB has been tracking the electricity consumption of all Crédit
Agricole
CIB Group entities, including Indosuez Wealth Management entities, data centres and
remote sites in the Paris region. Over a total surface area of 310,000 m 2
, electricity consumption was reported on for almost 305,000 m 2 , constituting
a 98% coverage ratio.
For Crédit Agricole CIB in the Paris region, the buildings in Montrouge and Saint-Quentin-en-Yvelines
consume 100% "green" electricity, meaning that it is generated by renewable sources
of energy. Actions are regularly implemented to limit consumption (e.g.: replacement
of lighting in the carpark of the Champagne building with LEDs, taking account of
public holidays, and installation of a double flow AHU in the Provence building).
In London, the Nordic countries and Brazil, the electricity consumed is also 100%
"green".
GAS
Crédit Agricole CIB reports on the consumption of gas of all Crédit Agricole CIB
Group
entities, including those of Indosuez Wealth Management.
For Crédit Agricole CIB Ile-de-France, actions are regularly implemented in order
to limit consumption (e.g.: improvement in building management systems).
HEAT OR STEAM
NETWORKS AND URBAN NETWORK
This source of heating is mainly used in North America, Russia and Luxembourg.
Water consumption
With regard to Crédit Agricole CIB in Montrouge, the Éole and Terra buildings are
equipped with a rainwater recovery system and use water saving machines for cleaning
the floors. In London, an environmental charter was established at the end of 2018
in order to minimise water use.
Paper
Crédit Agricole CIB is continuing actions which aim to reduce paper consumption.
These
include the sending of electronic greetings cards, encouraging printing on both sides
or the use of digital documents.
7.4 TRAVEL FOOTPRINT
Given the considerable weighting of personal travel in Crédit Agricole CIB's global
carbon audit, business travel and commuting measures constitute the main mitigating
factors in the Company's direct footprint.
Company Travel
Plan
Despite continuing efforts to control the travel footprint in 2018, there was a
significant
increase (+17%) in miles covered under the heading of business travel by train or
plane between 2017 and 2018, linked to the strong rise in staff numbers.
On the campuses in Montrouge and Saint-Quentin-en-Yvelines, actions taken to raise
the awareness of employees include, among others: replacement of electric bicycles,
incentives for carpooling with reserved parking spaces and video-conference equipment
to reduce travel.
Mobility Plan
In compliance with its obligations, on the one hand, under the Energy Transition
Act
and the filing of a Mobility Plan and, on the other hand, under the objectives set
by the Crédit Agricole Group to reduce its greenhouse gas emissions, Crédit Agricole
CIB actively participated in the launching, monitoring and completion of work covered
in the Mobility Plan.
In France, commuting accounts for approximately 6% of Crédit Agricole CIB's carbon
footprint.
A steering committee with representatives from eight Crédit Agricole Group entities
present on the campuses of Evergreen and St Quentin was created in February 2017.
A call for tender was launched and two service providers were chosen. With the help
of one service provider, various works were carried out throughout 2018, 12,000 employees
were surveyed and there were two dialogue workshops, all with a view to better understanding
expectations in the area of travel. Various actions were then suggested and approved
in the Group CSR Committee: discussions on teleworking, developing the use of the
bicycle now that Montrouge council is creating cycle paths, introduction of a car-pooling
application (a call for tender for the six entities will be launched in 2019 to choose
a provider for the car-sharing application).
In addition, Indosuez Wealth Management in Luxembourg has implemented various initiatives:
| ― |
free subscriptions for employees to bicycles provided by the
Luxembourg city authority;
|
| ― |
tightening of environmental criteria for the choice of leasing
vehicles (maximum emissions
reduced from 150 g CO2eq/km to 110 g CO2eq/km);
|
| ― |
encouraging, by raising awareness, the use of video-conferencing;
|
| ― |
training in eco-driving;
|
| ― |
setting up a car-pooling platform;
|
| ― |
awareness of the use of tablets during sales appointments, in
order to limit the printing
of customer forms.
|
3 CORPORATE GOVERNANCE
Executive Committee
of Crédit Agricole CIB on 31 December 2018.
| 1 CHIEF EXECUTIVE OFFICER |
1 DEPUTY CHIEF EXECUTIVE OFFICER |
| 3 DEPUTY GENERAL MANAGER |
|
| 10 HEADS OF BUSINESS LINES AND SUPPORT FUNCTIONS |
|
The board of Directors
| 7 BOARD MEETINGS in 2018 |
4 SPECIALISED COMMITTEES |
|
|
• Audit Committee |
|
|
• Risks Committee |
|
|
• Compensation Committee |
|
|
• Appointments and Governance Committee |
| 93.3 % ATTENDANCE at the meetings in 2018 |
|
1. BOARD OF DIRECTORS
REPORT ON CORPORATE GOVERNANCE
To the shareholders,
Pursuant to the last paragraph of Article L. 225-37 of the French Commercial Code,
this report was prepared by the Board of Directors as a supplement to the management
report. It presents the information which is required under Articles L. 225-37, L.
225-37-2 to L. 225-37-5 of the French Commercial Code especially the information concerning
the composition of the management bodies (Executive Management and Board of Directors),
and the conditions for preparing and organising the Board's work, its committees and
remuneration.
It was prepared on the basis of the work of the Board of Directors and its committees,
the Secretary to the Board of Directors, the Human Resources Department and the procedures
and documentation on internal governance existing inside the Company.
This report was previously presented to the Appointments and governance Committee
and to the Compensation Committee with respect to the sections which are covered by
their respective areas of expertise. It was approved by the Board of Directors at
its meeting on 11 February 2019.
As a preliminary, you are reminded that Crédit Agricole Corporate and Investment
Bank
(Crédit Agricole CIB) applies the AFEP-MEDEF Corporate Governance Code, revised in
June 2018. This document is available online on the following sites: http://www.afep.com
or http://www.medef.com/fr/
1.1 STRUCTURE
OF THE CORPORATE GOVERNANCE
1.1.1 Separation
of the functions of Chairman of the Board of Directors and Chief
Executive Officer
The function of Chairman of the Board of Directors is separate from that of Chief
Executive Officer.
The Board of Directors decided to separate these functions in May 2002, in accordance
with Article 13, paragraph 5, of the Company's Articles of Association and with French
Law No. 2001-420 of 15 May 2001 on new economic regulations. The decision followed
the decision of the May 2002 General Meeting to change the Company from a société
anonyme (public limited company) governed by a Supervisory Board and Management Board
to a société anonyme governed by a Board of Directors.
The separation of these functions is in accordance with the provisions of Article
L. 511-58 of the French Monetary and Financial Code, which stipulates that the position
of Chairman of the Board of Directors of a credit institution may not be held by the
Chief Executive Officer.
Mr Philippe Brassac was appointed as the Chairman of the Board of Directors from
20
May 2015. The Board of Directors meeting on 9 May 2016 renewed his mandate for his
term of office as a Director, i.e. up to the end of the Ordinary General Meeting which
rules on the financial statements for the 2018 financial year.
In accordance with Article 15 of the Company's Articles of Association, the Chairman
of the Board of Directors organises and directs the Board's work and ensures that
the Company's bodies function correctly and that the Directors are able to perform
their missions. In general, the Chairman possesses all the powers attributed to him
by the legislation in force.
Information on the composition of the Executive Management is available at point
1.1.4
of this report.
1.1.2 Composition
of the Board of Directors
PROVISIONS IN
THE ARTICLES OF ASSOCIATION
The Company's Articles of Association stipulate that the Board of Directors is
composed
of between 6 and 20 Directors: at least six appointed by the General Meeting of Shareholders
and two elected by the employees in accordance with Articles L. 225-27 to L. 225-34
of the French Commercial Code.
The term of office of the Directors appointed by the General Meeting is three years
(Article 9 of the Articles of Association).
Any Director reaching the age of sixty-five is deemed to have retired from office
at the end of the Annual General Meeting that follows the date of the birthday in
question. However, as an exceptional measure, the term of office of a Director appointed
by the General Meeting who has reached the age limit may be renewed for a maximum
of five subsequent one-year periods, provided the total number of Directors aged 65
or over does not exceed one third of the total number of Directors in office (Article
10 of the Articles of Association).
The two Directors representing the employees are elected for a period that expires
the same day: either at the end of the Annual General Meeting of Shareholders held
in the third calendar year following that of their election, or at the end of the
electoral process organised during this third calendar year if the process occurs
after the Shareholders' Meeting (Article 9 of the Articles of Association). The following
individuals may also attend meetings of the Board of Directors in an advisory capacity:
| ― |
the non-voting Director(s) designated by the Board of Directors
in accordance with
Article 17 of the Articles of Association;
|
| ― |
one member of the Works Council designated by the said council.
|
► Changes to the
composition of the Board in 2018
| Directors |
Term of office ended on |
Renewal |
Appointment |
| Jacques BOYER |
|
|
AGM 4 May 2018 |
| Bertrand CORBEAU |
|
AGM 4 May 2018 |
|
| Elisabeth EYCHENNE |
30 January 2018 * |
|
|
| Olivier GAVALDA |
|
|
AGM 4 May 2018 |
| François IMBAULT |
AGM 4 May 2018 |
|
|
| Jean-Pierre PAVIET |
AGM 4 May 2018 |
|
|
| Catherine POURRE |
|
AGM 4 May 2018 |
|
| Odet TRIQUET |
|
|
AGM 4 May 2018 |
*
Resigned effective 30 January 2018
The average age of directors on the Crédit Agricole CIB Board of Directors is 57
years.
► Directors and
Non-voting Directors at 31 December 2018
| Directors/Non-voting directors at
31 December 2018 |
Date of first appointment |
Date of last appointment |
End of the current term of office |
Chairman or Member of a Committee |
| Philippe BRASSAC (Chairman of the Board of Directors) |
23 February 2010 (1) |
9 May 2016 |
AGM 2019 |
|
| Jean de Dieu BATINA (5) |
8 November 2017 |
|
2020 |
Member of the Compensation Committee |
| Jacques BOYER |
4 May 2018 |
|
AG 2021 (3) |
Member of the Audit Committee |
| Audrey CONTAUT (5) |
8 November 2017 |
|
2020 |
|
| Bertrand CORBEAU |
9 May 2016 (1) |
4 May 2018 |
AGM 2021 |
|
| Marie-Claire DAVEU |
30 April 2014 |
4 May 2017 |
AGM 2020 |
Chairwoman of the Risk Committee Member of the Audit
Committee and of the Appointments
and Governance Committee
|
| Claire DORLAND CLAUZEL |
9 May 2016 |
|
AGM 2019 |
Chairwoman of the Appointments Committee and Governance
Committee Member of the Audit
Committee and the Compensation Committee
|
| Olivier GAVALDA |
4 May 2018 |
|
AGM 2019 (4) |
|
| Nicole GOURMELON |
9 May 2016 |
|
AGM 2019 |
Member of the Risk Committee |
| Françoise GRI |
4 May 2017 |
|
AGM 2020 |
Member of the Risk Committee |
| Luc JEANNEAU |
4 May 2017 |
|
AGM 2020 |
Member of the Compensation Committee and of the Appointments
and Governance Committee |
| Anne-Laure NOAT |
30 April 2014 |
4 May 2017 |
AGM 2020 |
Chairwoman of the Audit Committee and the Compensation
Committee Member of the Risk
Committee
|
| Catherine POURRE |
4 May 2017 |
4 May 2018 |
AGM 2021 |
Member of the Audit Committee and the Risk Committee |
| François THIBAULT |
11 May 2010 |
9 May 2016 |
AGM 2019 |
Member of the Risk Committee |
| Odet TRIQUET |
4 May 2018 |
|
AGM 2021 |
|
| Jean-Pierre VAUZANGES |
5 November 2013 (1) |
4 May 2017 |
AGM 2020 |
Member of the Audit Committee |
| Paul CARITE (Non-voting Director) |
9 February 2018 (2) |
|
2021 |
|
| Jacques DUCERF (Non-voting Director) |
9 May 2016 (2) |
|
2019 |
|
(1)
Co-option by the Board of Directors.
(2)
Appointment by the Board of Directors in accordance with Article 17 of the Articles
of Association.
(3)
Given that Jacques Boyer has reached the age limit for Directors (Article 10 paragraph
2 of the Articles of Association), his term as director will expire at the 2019 Shareholders'
Meeting.
(4)
Mr Gavalda was appointed for the remainder of the term of his predecessor (who resigned).
(5)
Directors elected by the employees.
INDEPENDENT DIRECTORS
ON THE BOARD OF DIRECTORS (IN ACCORDANCE WITH THE RECOMMENDATIONS
OF THE AFEP-MEDEF CODE)
*
Percentage calculated according to recommendation 8.3 of the AFEP-MEDEF Code.
Upon recommendations of the Appointments and Governance Committee, the Board of
Directors
reviewed the list of Independent Directors at its meeting of February 11, 2019. Following
the appointments, there were five Independent Directors on 31 December 2018: Mesdames
Daveu, Dorland Clauzel, Gri, Noat and Pourre. The proportion of Independent Directors
on the Board of Directors on 31 December 2018 amounted to more than a third of the
Directors appointed by the General Meeting of Shareholders. It conforms with the Recommendation
No. 8.3 of the AFEPMEDEF Code which states that at least one third of the Directors
appointed by the General Meeting of Shareholders in companies, whose capital is held
by a majority shareholder, must be Independent Directors. The composition of the Board
of Directors reflects the Crédit Agricole Group's wish for chairmen or chief executive
officers of regional branches of Crédit Agricole to be represented on the Boards of
Directors of some of Crédit Agricole S.A.'s subsidiaries. These Directors who come
directly from the Crédit Agricole S.A. Group are not considered to be independent
because of their functions inside the Group.
► Table of Independent
Directors (AFEP-MEDEF criteria)
N.B.:
✓ indicates that the criterion is respected
X indicates that the criterion is not respected
| 31 December 2018 (and reviewed on
11 February 2019) |
Criterion(1) |
Criterion(2) |
Criterion(3) |
Criterion(4) |
Criterion(5) |
Criterion(6) |
| Madame DAVEU |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
| Madame DORLAND CLAUZEL |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
| Madame GRI |
X * |
✓ |
✓ |
✓ |
✓ |
✓ |
| Madame NOAT |
✓ |
✓ |
✓ |
✓ |
✓ |
✓ |
| Madame POURRE |
X * |
✓ |
✓ |
✓ |
✓ |
✓ |
| 31 December 2018 (and reviewed on
11 February 2019) |
Criterion(7) |
Possibilities(8)(b) |
| Madame DAVEU |
✓ |
|
| Madame DORLAND CLAUZEL |
✓ |
|
| Madame GRI |
✓ |
(*) Criterion 1: Mrs Gri is also: An independent Director of Crédit Agricole
S.A.. Her
position was examined by the Appointments and Governance Committee and the Board of
Directors which, pursuant to 8 b) below decided that Mrs Gri could be considered as
independent.
|
| Madame NOAT |
✓ |
|
| Madame POURRE |
✓ |
(*) Criterion 1: Mrs Pourre is also: An independent Director of Crédit
Agricole S.A..
Her position was examined by the Appointments and Governance Committee and the Board
of Directors which, pursuant to 8 b) below decided that Mrs Pourre could be considered
as independent.
|
(1)
see § 8.5.1 of the AFEP-MEDEF Code
Is not currently nor has been in the last five years:
- an employee or Executive Corporate Officer of the Company;
- an employee, Executive Corporate Officer or Director of a company consolidated by
the Company;
- an employee, Executive Corporate Officer or Director of the parent company of the
Company or of a company consolidated by that parent company
(2)
see §8.5.2 of the AFEP-MEDEF Code
Is not a Corporate Officer of a company in which the Company, directly or indirectly,
acts as a Director or in which an employee designated as such or a Corporate Officer
of the Company (currently or in the last five years) is a Director
(3)
see §8.5.3 of the AFEP-MEDEF CodeIs not a client, supplier, corporate banker, investment
banker or advisor:
- who plays a significant role in the Company or its Group;
- or for whom the Company or its Group represents a significant proportion of business.
(4)
see §8.5.4 of the AFEP-MEDEF Code
Has no close family relationship with a corporate officer.
(5)
see §8.5.5 of the AFEP-MEDEF Code
Has not been an auditor of the Company in the last five years.
(6)
see §8.5.6 of the AFEP-MEDEF Code
Has not been a Director of the Company for more than 12 years. The loss of the status
of independent director occurs on the anniversary of the 12 years.
(7)
see §8.6 of the AFEP-MEDEF Code
A non-executive Corporate Officer may not be deemed an independent if he or she receives
variable compensation in cash or in the form of shares or any other compensation related
to the performance of the Company or Group.
(8)
Possibilities:
(a)
Directors representing major shareholders in the Company or its parent company may
be deemed independents providing that the shareholders do not participate in the control
of the Company. However, should the shareholder own more than 10% of the capital or
voting rights, the Board, based on a report by the Appointments Committee, must systematically
query the Director's independence, taking into account the Company's ownership structure
and the existence of a potential conflict of interest (cf §8.7 of the AFEP-MEDEF Code);
(b)
The Board of Directors may take the view that a Director who fulfils the aforementioned
criteria should not be deemed independent because of his or her particular situation
or that of the Company, given the Company's ownership structure or for any other reason.
Conversely the Board may consider that a Director although not satisfying the above
criteria is however independent (cf §8.4 last paragraph of the AFEP-MEDEF Code).
The position of the two Independent Directors (Mrs Gri and Mrs Pourre) was examined
with respect to the first criterion.
Mrs Gri and Mrs Pourre are Directors of Crédit Agricole S.A.. The Appointments
and
Governance Committee and the Board of Directors considered that this situation reflected
Crédit Agricole S.A.'s desire for the Chairwomen of its Audit Committee and Risk Committee
to play a special role vis-a-vis its subsidiaries to ensure continuity in their mission
and that this situation was unlikely to jeopardise their independence.
The situation of five Independent female Directors was examined with regards to
the
third criterion.
The Appointments and Governance Committee and the Board of Directors noted that
the
companies in which the five Directors hold functions or corporate mandates do not
have any commercial dealings with the Company, are not considered to be suppliers
or significant advisers of the Company, or that the commercial NBI realised by Crédit
Agricole S.A. with these entities is insignificant and unlikely to jeopardise their
independence. This review was performed in particular for the Kering Group, Albioma
and Ponant (Mrs Daveu), for Eurogroup Consulting (Mrs Noat), for Edenred, WNS Services
and 21 Centrale Partner (Mrs Gri) and for SEB and Bénéteau (Mrs Pourre).
The Appointments and Governance Committee and the Board of Directors also noted
that
their respective positions in these companies did not mean that they were involved
in, or had direct business dealings with, Crédit Agricole CIB.
1.1.3 Diversity
within the Board of Directors and the governing bodies of Crédit Agricole
CIB
1.1.3.1 DIVERSITY
WITHIN THE BOARD OF DIRECTORS
♦ Balanced representation
of men and women on the Board of Directors
At 31 December 2018, the Board of Directors had seven female members (43.75%),
six
of whom were appointed by the General Meeting, i.e. 42.85% of the Directors appointed
by the Shareholders' General Meeting.
In accordance with Article 435[2 c] of EU Regulation No. 575/2013 and Article L.
511
-99 of the French Monetary and Financial Code, the Appointments and Governance Committee
reviewed the objective of a balance between the genders on the Board of Directors,
and the policy required to achieve it.
Pursuant to Article L. 225-17 of the French Commercial Code, there must be a balanced
representation of women and men on the Board of Directors. In accordance with Article
L. 225-18-1 of the French Commercial Code, this balanced representation on the Board
of Directors of Crédit Agricole CIB must result in at least a 40% proportion for each
sex.
The Appointments and Governance Committee also noted that the proportion of women
among the Directors appointed by the General Shareholders' Meeting of Crédit Agricole
Corporate and Investment Bank was 42.85%. The Bank has an objective of maintaining
this ratio at 40% minimum for each sex. The policy developed involves actively seeking
suitable high-quality candidates - both men and women - in order to ensure that this
ratio is respected if the members of the Board of Directors changes, whilst ensuring
complementarity between the Directors' careers, experiences and skills.
♦ Diversity policy
within the Board of Directors
In keeping with its Social Responsibility policy, Crédit Agricole CIB aims to promote
diversity at all levels, particularly among members of its Board of Directors.
To this end, when considering new appointments, the Board of Directors takes diversity
into account to ensure a sufficient range of qualities and skills allowing a variety
of points of view relevant to the decision-making process.
Priority is given to the candidate's ability to maintain a complementarity in career
paths, experiences and skills within the Board of Directors, in particular by taking
into account their knowledge of the banking sector as defined by the guidelines of
the EBA (EBA/ GL/2017/12 of 21 March 2018), the ECB Guide dated May 2018 relative
to the fit and proper evaluation, or any other text which would replace or supplement
them.
The Appointments and Governance Committee and the Board of Directors have no policy
concerning the age limit of the members of the Board since priority is given to examining
their experience and competence. For this reason, the legal and regulatory requirements
naturally lead to the selection of candidates with recognized skills and experience
in accordance with the applicable texts.
The search to find the best director candidates will be done in particular by gathering
suggestions from the members of the Board and the Crédit Agricole Group.
This approach aims to ensure that the composition of the Board of Directors reflects
the shareholding structure of Crédit Agricole CIB, which is more than 99% owned by
Crédit Agricole Group companies, as well as to attract directors with diversified
and complementary profiles in terms of training, skills and professional experience
while respecting the legal minimum proportions in terms of gender equality (40% representation
for each sex) and the number of Independent Directors (1/3 of board members) pursuant
to the AFEP-MEDEF Code.
It is noted that the Board of Directors of Crédit Agricole CIB, in accordance with
the provisions of Articles L.225-27 et seq. of the French Commercial Code, must have
at least two directors elected by the employees and that Article 17 of the Articles
of Association permit the appointment of one or several non-voting directors. These
provisions help to enhance diversity within the Board of Directors.
Mrs Audrey Contaut and Mr Jean de Dieu Batina were elected as Directors to represent
the employees in accordance with Articles L. 225-27 et seq. of the French Commercial
Code and Article 9 of the Company's Articles of Association.
Messrs Jacques Ducerf and Paul Carite were appointed as Non-voting Directors by
the
Board of Directors, respectively on 9 May 2016 and on 9 February 2018, both for a
period of three years in accordance with the provisions of article 17 of the Company's
Articles of Association to support the development of Crédit Agricole CIB's relations
with the Regional Banks, particularly with regard to the monitoring of Intermediate
Size Enterprises (ISE).
All Directors of the Company are of French nationality.
1.1.3.2 DIVERSITY
WITHIN THE DECISION-MAKING BODIES
Convinced that diversity is a real driver of performance and innovation, Crédit
Agricole
CIB for several years now been following a proactive diversity policy. It is within
this context in particular that the Bank actively participates in the Crédit Agricole
Group's Diversity Plan launched in 2016.
In order to identify the main issues and measure the effectiveness of its diversity
policy, Crédit Agricole CIB monitors gender distribution indicators throughout the
year. In 2016, all senior executives set quantitative targets for the demographics
of their business to be achieved by the end of 2019.
At December 31, 2018, women comprised 43% of the global workforce and 31.4% of
Crédit
Agricole CIB managers. Women accounted for 18.1% and 25%, respectively of members
of the managerial circles 1 and 2 (principal managers) and the Executive Committee
of the Bank. Moreover, in terms of gender diversity within the top 10% of high-level
positions of responsibility, the results show that the feminization of circle 1, comprising
25 people, is around 16%.
In addition, the three main areas of the professional gender equality agreement
renewed
in France in 2016 for a period of 3 years are: to ensure balanced job recruitment
and equal pay, train employees in, and raise their awareness of, the principles of
professional equality and non-discrimination, support women in the promotion of their
careers particularly on their return to work after maternity leave. Crédit Agricole
CIB also deploys several awareness-raising and support initiatives in its various
establishments (Diversity Week, dedicated training courses, mentoring program, return
from maternity leave workshops, etc.), which can be found on page 50.
Finally, under the terms of Article L. 225-37-1 of the Commercial Code, the Board
of Directors deliberates annually on Crédit Agricole CIB's policy in the area of equal
pay and opportunity and the implementation of the gender equality plan. During these
deliberations it examines the results achieved in the Bank's various businesses, particularly
in management circles.
1.1.4 Composition
of the Executive Management and limitations on the Chief Executive
Officer's powers
► Composition
of the Executive Management at 31 December 2018
|
|
1st Appointment
|
Last renewal |
End of term of office |
| Jacques RIPOLL (1) Chief Executive Officer
|
1 November 2018 |
|
Indefinite |
| François MARION Deputy Chief Executive Officer |
18 May 2016 |
1 November 2018 |
Indefinite |
(1)
Jean-Yves Hocher took his retirement and stepped down as the Company's Chief Executive
Officer on 1 November 2018.
The Chief Executive Officer and Deputy Chief Executive Officers are also the effective
senior corporate executives within the meaning of the French Monetary and Financial
code and the regulations which apply to credit institutions.
On 18 June 2018, Mr Jacques Prost stepped down as Deputy Chief Executive Officer
to
take up other positions within the Crédit Agricole Group. Mr Régis Monfront became
Deputy General Manager on 11 July 2018 following the end of his term as Deputy Chief
Executive Officer at Crédit Agricole CIB.
LIMITATIONS ON
THE POWERS OF THE CHIEF EXECUTIVE OFFICER
The limitations on the Chief Executive Officer's powers are specified below, as
well
as in the presentation of the powers of the Board of Directors at point 1.2.2.
The rules of procedures of the Board of Directors stipulate that, in the performance
of his duties, the Chief Executive Officer is required to comply with the internal
control rules that apply within the Crédit Agricole Group and the strategies defined
and decisions taken, which under the law or according to the aforementioned rules
are the responsibility of the Board of Directors or the Shareholders' Meeting.
These rules of procedures also stipulate that the Chief Executive Officer is required
to refer all significant projects concerning the Company's strategic decisions, or
that may affect or alter its financial structure or scope of activity, to the Board
of Directors, requesting instructions. In addition, as mentioned in the "Powers of
the Board of Directors" at point 1.2.2, as a purely internal limitation that is not
binding on third parties, the Chief Executive Officer is required to obtain prior
authorisation from the Board of Directors or its Chairman before entering into certain
types of transactions.
1.2 FUNCTIONING,
PREPARATION AND ORGANISATION OF THE BOARD OF DIRECTORS' WORK
The functioning and preparation and organisation of the work done by the Board
of
Directors comply with laws and regulations currently in force, the Company's Articles
of Association, the rules of procedures applicable to the Board of Directors and internal
directives.
1.2.1 Mode and
frequency of the Board of Directors
The Articles of Association state that the Board shall meet as often as the interests
of the Company require, at the request of the Chairman or at least one third of the
Directors. The Board's rules of procedures state that, unless otherwise decided by
the Chairman, the Board may hold its meeting by means of telecommunication that allow
for the identification of Directors and ensure their full participation, provided
that at least five Directors are physically present at the location of the Board Meeting
(Article 11 of the Articles of Association) and that, in accordance with the law,
the proceedings do not concern the preparation and approval of the annual separate
and consolidated financial statements and management reports.
1.2.2 Powers of
the Board of Directors
The powers of the Board of Directors are listed in Article L. 225-35 of the French
Commercial Code and are detailed in the Board's rules of procedures. Within the framework
of the mission entrusted to it by law and by banking regulations, and in view of the
powers vested in the Executive Management, the Board of Directors defines strategy
and the Company's general policies. It approves, as necessary and as proposed by the
Chief Executive Officer and/or the Deputy Chief Executive Officer, the resources,
structures and plans allocated for the implementation of the general strategies and
policies it has defined. The Board rules all the questions connected with the Company's
administration submitted to it by the Chairman and the Chief Executive and by its
specialised committees or on any other question which is submitted to it.
In addition to the aforementioned powers and those conferred upon it by law and
the
rules of procedures, it decides on the proposal of the Chief Executive Officer and/or
the Deputy Chief Executive Officer:
| ― |
all external growth and downsizing operations by way of:
| ― |
the creation, acquisition or disposal of any subsidiaries or
equity investments (excluding
entities created for one or more specific transactions);
|
| ― |
the opening or closure of any branch abroad;
|
| ― |
the acquisition, disposal, exchange or integration of new businesses
or parts of businesses;
|
|
| ― |
likely to lead to an investment or disposal that may amount to
more than €50 million;
|
| ― |
or the provision of collateral to guarantee the Company's commitments
(except for
financial market transactions), when the guarantee concerns Company assets with a
value of more than €50 million.
|
In addition, on the proposal by the Chief Executive Officer and/ or the Deputy
Chief
Executive Officer, the Board authorises the purchase or sale of real estate made in
the name or on behalf of the Company, when the amounts of these transactions exceed
€30 million.
The Board of Directors also has specific powers regarding other legal and regulatory
provisions applicable to credit institutions and companies whose securities are traded
in a regulated market in terms of corporate governance, risk management and internal
control.
1.2.3 Referral
procedure, information procedure and terms of the Board's intervention
-Conflicts of Interest
In order to enable the Secretary of the Board of Directors to prepare the Board
meetings,
an internal governance document sets out the conditions of intervention of and the
means of referral to the Board. This document notably stipulates the conditions under
which the head office or branch departments must inform the Secretary, within the
scope of the schedule for the Board's meetings, of the points which are liable to
be added to the draft agenda for each meeting as well as the information documents.
The draft agenda is then sent for approval to the Chairman of the Board of Directors.
The Board of Directors' rules of procedures specify the roles of the Board's committees.
They also contain a reminder of the principles and best practices for corporate governance
that help to raise the quality of the work undertaken by the Board of Directors, including
the provision of the information necessary for the Directors to usefully contribute
to the issues entered into the agenda, the obligations of confidentiality, and the
obligations and recommendations regarding privileged information and conflicts of
interest, the details of which are restated in section 1.3.3 "Déontologie, conflicts
of interest and informations privilégiées".
The Board of Directors, in accordance with Articles L. 225-38 et seq. of the French
Commercial Code, authorises related party agreements prior to their signature. The
Directors and Managers concerned by the agreement do not take part in the voting.
Information relating to the 2018 agreements (new agreements, concluded and authorised,
as well as those entered into previously which continued in 2018) is sent to the Statutory
Auditors, who will present their special report to the General Meeting of Shareholders.
This report is provided on page 464 of the Registration Document. At its meeting on
11 February 2019, the Board reviewed the related-party agreements entered into previously
and still in force in 2018, in accordance with the provisions of Article L. 225-40-1
of the French Commercial Code.
1.2.4 Activities
of the Board of Directors in 2018
The Board of Directors met seven times during the 2018 financial year.
For almost all items on the agenda of the Board meetings, supporting documentation
is distributed several days before the meeting.
The principal matters examined during these meetings, following any necessary initial
analysis by the specialised committees, were as follows:
CONCERNING BUSINESS
AND STRATEGY
The Board of Directors reviewed the quarterly presentation on the Company's commercial
activity, as well as presentations of the 2018 budget, the 2019 budget and the 2022
plan.
The Board was informed of transactions concerning certain international subsidiaries
and holdings and reorganization operations at Group level.
In addition, it approved the provisions put in place by Crédit Agricole CIB to
comply
with MIFID2 requirements.
CONCERNING THE
FINANCIAL STATEMENTS, THE FINANCIAL POSITION AND THE DEALINGS WITH
THE STATUTORY AUDITORS
In accordance with regulatory requirements, the Board of Directors approved the
corporate
and consolidated financial statements for the 2017 financial year and examined the
half-yearly and quarterly results during 2018. The Chairman of the Audit Committee
presented a report on the work of the Audit Committee each time the Board of Directors
examined these financial statements, and the Statutory Auditors informed the Board
of their observations.
CONCERNING RISKS
AND INTERNAL CONTROL
After hearing the Risks Committee, the Board of Directors examined the following
on
a quarterly basis:
| ― |
the position of the Company with regard to the different risks
to which it is exposed
(market risks, counterparty risks, operational risks, cost of risk and provisions,
broken down by country and by segment) and with regard to the previously approved
risk appetite;
|
| ― |
the position of the Company in terms of compliance with regular
updates on the implementation
of the OFAC remediation plan following the commitments given to US authorities;
|
| ― |
legal risks with the various ongoing lawsuits and disputes;
|
| ― |
the position regarding liquidity.
|
Half-yearly updates were also presented to the Board of Directors:
| ― |
on periodic control missions (Group Control and Audit);
|
| ― |
on the internal control report and the supervision and measurement
of risks (Annual
report and half-year information, RACI).
|
The following were also presented to the Board of Directors:
| ― |
the annual report by the head of Compliance on Investment Services
(RCSI);
|
| ― |
a report on the implementation of the law regulating banking
activities (SRAB law)
and the Volcker rule;
|
| ― |
the 2019 audit plan;
|
| ― |
communications from the supervisory authorities, the answers
provided and the actions
implemented to address the observations made;
|
| ― |
Code of conduct, anticorruption Code and and the Charter "Work
behavior".
|
The Board of Directors also approved:
| ― |
updates to the risk appetite and the related statement;
|
| ― |
the liquidity risk management and control system and the procedures,
systems and tools
for measuring this risk as well as the emergency liquidity plan;
|
| ― |
the list of major risks and the stress tests programme;
|
| ― |
on a quarterly basis, the Company's risk strategies approved
by the Strategy and Portfolio
Committee (CSP) and the Group Risks Committee (CRG);
|
| ― |
a review of the criteria and thresholds used to define significant
incidents detected
by the internal control procedures which remain unchanged compared to last year;
|
| ― |
the statement on the adequacy of the risk control mechanism and
the quality of information
given to the Board;
|
| ― |
the ICAAP and ILAAP statements;
|
| ― |
the declaration of the fight against modern slavery in the Modern
Slavery Act 2015.
|
CONCERNING GOVERNANCE,
COMPENSATION AND HUMAN RESOURCES
After hearing the Appointments and Governance Committee, the Board of Directors
then:
| ― |
reviewed its composition as well as that of the specialised committees;
|
| ― |
put forward the appointments of new members of the Board and
the renewal of various
others at the Shareholders' Meeting;
|
| ― |
reviewed the composition of the Executive Management and appointed
executive directors;
|
| ― |
reviewed the qualification of Independent Directors within the
scope of the criteria
in the AFEP-MEDEF Code;
|
| ― |
performed a self-assessment of the functioning of the Board of
Directors and examined
the self-assessment of the individual and collective skills of the members of the
Board;
|
| ― |
examined the readjustment of the estimated time required to carry
out various functions
within the Board and the time that each Director can devote to his duties;
|
| ― |
acknowledged the policy adopted by the Appointments and Governance
Committee in terms
of the balanced representation of men and women within its membership;
|
| ― |
approved a diversity policy for the Board of Directors.
|
After hearing the Compensation Committee, the Board of Directors then:
| ― |
approved the compensation of the members of Executive Management;
|
| ― |
defined the principles and criteria for determining the compensation
of Executive
Corporate Officers for 2018 which is submitted to the general Meeting for its approval;
|
| ― |
examined the conditional rights the Executive Corporate Officers
have under the defined-benefit
pension commitments;
|
| ― |
determined the distribution of directors' fees;
|
| ― |
approved the budget for the variable compensation of the employees;
|
| ― |
approved the Company's compensation policy;
|
| ― |
examined the report required by the French Prudential Supervision
Authority presenting
information regarding the Company's compensation policy and practices;
|
| ― |
acknowledged the social audit and the international workforce
statistics;
|
| ― |
reviewed the methodology for determining identified staff and
the results concerning
this group;
|
| ― |
deliberated on the Company's policies on gender equality and
equal pay.
|
It approved the terms of the Corporate Governance report, the terms of the management
report, in particular the information on CSR, approved the agenda and the resolutions
of the annual Ordinary General Meeting and the terms of its report to this General
Meeting.
It was informed of the appointment of the new Director of risks and permanent control.
It regularly reviewed the list of people authorised for bond issues and approved
the
arrangements for the training of the Directors elected by the employees.
CONCERNING RELATED-PARTY
AGREEMENTS
In accordance with the provisions of Article L. 225-38 of the French Commercial
Code,
the Board of Directors authorised related-party agreements concerning:
| ― |
a memorandum of understanding on the organisation of the reconciliation
of certain
infrastructure and IT production activities within a new CA-GIP entity signed between
Crédit Agricole S.A., Crédit Agricole CIB, and other entities of the group:
|
| ― |
a partnership agreement concerning the rules of governance of
CA-GIP, the organisation
of partner relations, the conditions that the parties intend to respect in the event
of transfer of all or part of their stake in the capital of CA-GIP;
|
| ― |
a guarantee agreement in favour of CA-GIP in connection with
the merger of SILCA concerning
the representations and warranties granted by the partners to CA-GIP and the respective
rights and obligations of the parties in the event of breach or inaccuracy of one
or more of these statements;
|
| ― |
the regulated commitments made by Crédit Agricole S.A. to Mr
Jacques Ripoll, Chief
Executive Officer.
|
| ― |
the regulated commitments entered into by Crédit Agricole CIB
on behalf of Mr François
Marion, Deputy Chief Executive Officer, concerning the agreement relating to the suspension
of his employment contract and pension commitments.
|
The details of these agreements are presented by the Statutory Auditors in their
special
report in chapter 8 of this Registration Document.
In accordance with the provisions of Article L. 225-40-1 of the French Commercial
Code, the Board of Directors re-examined the agreements entered into and authorised
during previous financial years that continued to be executed in the course of the
financial year.
1.2.5 Assessment
of the skills and functioning of the Board of Directors
ASSESSMENT OF
THE COLLECTIVE AND INDIVIDUAL SKILLS OF THE DIRECTORS
The Appointments and Governance Committee carried out an assessment of the collective
and individual skills of Directors based on a self-assessment in November 2018. The
findings of this assessment presented to the Board show that:
| ― |
all the skill areas, both banking and non-banking, are covered;
|
| ― |
the Board has extensive expertise in the following areas: banking
activities, financial
markets, legal and regulatory requirements, bank governance, risks, management, corporate
management, human resources/ compensation, interpretation of financial information,
strategic planning;
|
| ― |
the Board's international experience could be further strengthened
at the time of
future appointments.
|
ASSESSMENT OF
THE FUNCTIONING OF THE BOARD OF DIRECTORS
A self-assessment of the performance of the Board of Directors was conducted during
the fourth quarter of 2018, based on an individual questionnaire consisting of 62
questions sent to each Board member. The questions concerned in particular: the organisation
of the Board, its operation, its composition and the quality of relationships within
it, the work of the various Board committees, and the training and information provided
for the Directors. The self-assessment was administered by the Appointments and Governance
Committee and presented to the Board.
The responses helped to:
| ― |
establish a certain number of strong points:
| ― |
the organisation of the Council (method of document transmission,
completeness of
information and quality of the minutes);
|
| ― |
the composition of the Board of Directors and the quality of
relationships (balance
of relations between the Board on the one hand and the Chairman or the General Management
on the other hand);
|
| ― |
the work of the different Committees of the Board (quality of
feedback on work communicated
to the Board, availability of contacts in particular);
|
|
| ― |
highlight the progress made in 2018 in certain areas, such as
document-transmission
deadlines and the functioning of the Board in terms of strategy.
|
The guidelines adopted by the Board for 2019 following the self-assessment of the
functioning of the Board include the continuation of efforts undertaken in terms of
the knowledge and sharing of Crédit Agricole CIB's strategy, the training of new directors
and synthesis of topics to allow more time for discussion.
► Attendance rate
at Board meetings Board of directors
The average attendance rate for members of the Board of Directors including those
whose terms of office expired during the year is 93.3% for all Board meetings in 2018.
► Average attendance
rate of Directors comprising the Board
|
|
Number of Board meetings which
the Director should have attended in 2018 |
Number of Board meetings which
the Director attended in 2018 |
Attendance rate |
| Philippe BRASSAC |
7 |
7 |
100.00% |
| Jean de Dieu BATINA |
7 |
7 |
100.00% |
| Jacques BOYER (2) |
5 |
5 |
100.00% |
| Audrey CONTAUT |
7 |
6 |
85.7% |
| Bertrand CORBEAU |
7 |
5 |
71.4% |
| Marie-Claire DAVEU |
7 |
7 |
100.00% |
| Claire DORLAND CLAUZEL |
7 |
7 |
100.00% |
| Olivier GAVALDA (2) |
5 |
5 |
100.00% |
| Nicole GOURMELON |
7 |
7 |
100.00% |
| Françoise GRI |
7 |
6 |
85.7% |
| François IMBAULT (1) |
2 |
2 |
100.00% |
| Luc JEANNEAU |
7 |
7 |
100.00% |
| Anne-Laure NOAT |
7 |
7 |
100.00% |
| Jean Pierre PAVIET (1) |
2 |
2 |
100.00% |
| Catherine POURRE |
7 |
6 |
85.7% |
| François THIBAULT |
7 |
7 |
100.00% |
| Odet TRIQUET (2) |
5 |
4 |
80.00% |
| Jean-Pierre VAUZANGES |
7 |
5 |
71.4% |
(1)
The term of office of Messrs Imbault and Paviet expired on 4 May 2018
(2)
Messrs. Boyer, Gavalda and Triquet were appointed as directors by the Ordinary General
Meeting of 4 May 2018.
1.2.6 Training
for Directors
A procedure defined in 2013 to welcome new Directors includes the delivery to any
new Director of a welcome booklet, which presents key documents relating to the governance
of the Company's corporate bodies, the Company's strategy and budget, the Registration
Document and the activity report for the previous year. When a new Director first
joins the Board, meetings are also organised between the new Director and Executive
Management members, the Head of Risks and Permanent Control, the CFO and the Head
of Compliance and the Head of Human Resources.
In addition to the programme established for new Directors, training measures for
all Directors continued in 2018. A seminar for Directors held in June 2018 provided
an opportunity for a better understanding of the expectations of the Bank's customers
by meeting the top management of two of Crédit Agricole CIB's biggest customers to
improve the knowledge of the Bank's activities and strategy. A technical training
session devoted to compliance (international sanctions, anti-money laundering / terrorism
financing, competition law, anti-corruption) and innovation (contribution of innovation
in terms of detection and risk control) was held in December 2018. Directors also
benefit from permanent access to an e-learning programme offering various courses
on the theme of compliance.
In addition, in accordance with the provisions of Articles L. 22530-2 and R. 225-34-3
of the French Commercial Code, the Board of Directors, at its meeting on 13 December
2018, determined the training to be followed by the employee Directors in 2019.
Finally, if judged opportune, a Director can receive individual training especially
on taking up new functions on the Board or its committees.
1.2.7 Specialised
committees of the Board of Directors
The Board has four specialised committees: an Audit Committee, a Risk Committee,
an
Appointments and Governance Committee, and a Compensation Committee.
The members of these committees are appointed by the Board of Directors in accordance
with its rules of procedures.
These specialised committees assist the Board of Directors in its duties and in
preparing
for discussions. They may, for example, conduct studies or submit opinions or recommendations
to the Board.
The committees interact where appropriate to ensure consistency in their work.
Each
committee reports on its work to the Board of Directors so that members can be fully
informed when participating in discussions.
Each committee carries out the missions that are assigned by the law and the regulations
in force, as well as by the rules of procedures of the Board of Directors and meets
periodically and as necessary, in order to review any subject within its jurisdiction.
The committee can request access to all the information it deems relevant to perform
its mission.
Each committee bases its work mainly on the summary information provided by the
departments
and on the interviews or meetings that it holds with Company people deemed useful
for the performance of its missions; if it so wishes, these interviews or meetings
can be held without the presence of the Executive Management. After informing the
Chairman of the Board of Directors, and in order to report to the Board of Directors,
the committee can have any studies required to assist the Board's deliberations drawn
up at the Company's costs, after verifying the objectivity of the expert selected.
AUDIT COMMITTEE
♦ Composition
of the audit committee at 31 December 2018
The rules of procedures of the Board of directors stipulate that the Audit Committee
is composed of at least four Directors.
MEMBERS AT 31
DECEMBER 2018
| ― |
Mrs Anne-Laure Noat, Independent Director, Chairwoman of the
Committee;
|
| ― |
Monsieur Jacques Boyer, Director;
|
| ― |
Mrs Claire Dorland Clauzel, Independent Director;
|
| ― |
Mrs Marie-Claire Daveu, Independent Director;
|
| ― |
Mrs Catherine Pourre, Independent Director;
|
| ― |
Mr Jean-Pierre Vauzanges, Director.
|
| ― |
Monsieur Boyer was appointed member of the Audit Committee by
the Board of Directors
on 4 May 2018.
|
In accordance with the AFEP-MEDEF Code (§15.1), the proportion of Independent Directors
is equal to two thirds.
A short biography is available in section 1.3 of this Registration Document.
♦ Missions of
the audit committee
The committee meets at least quarterly.
It liaises with the Statutory Auditors as often as required, and for the preparation
of the interim and annual financial statements.
EXTRACT FROM THE
RULES OF PROCEDURES OF THE BOARD OF DIRECTORS
"The committee's primary purpose is to monitor management issues related to the
development
and review of the corporate and consolidated financial statements, the effectiveness
of the internal control and risk management systems with respect to the procedures
in the preparation and treatment of accounting and financial information, monitoring
the work of the Statutory Auditors on these issues and their independence.
Without prejudice to the powers of the Board of Directors, its powers are in particular:
To monitor the
process of compiling financial information:
It monitors the process for preparing the financial information and if necessary
makes
recommendations to guarantee the integrity of this information. It checks the relevance
and performance of the accounting principles adopted by the Company to prepare the
parent company's financial statements and the consolidated financial statements.
To review the
corporate and consolidated financial statements
It examines the draft corporate and consolidated annual, half-yearly and quarterly
financial statements, before submission to the Board of Directors.
To review and
monitor the effectiveness of the internal control and risk management
systems relating to financial and accounting information:
It examines and monitors, without its independence being impaired, the effectiveness
of the internal control and risk management systems, regarding the procedures related
to the preparation and treatment of accounting and financial information. In this,
it makes an assessment of the quality of the internal control, proposes complementary
actions if and as necessary, monitors the work of the teams who are responsible for
internal control, including internal audit.
To monitor the
independence and objectivity of the Statutory Auditors Approves the
provision by the Statutory Auditors of the services mentioned in Article L. 822-11-2
of the French Commercial Code:
in accordance with the legal provisions and regulations applicable:
| ― |
to conduct the selection procedure when appointing the Statutory
Auditors and makes
a recommendation for the attention of the Board of Directors on their renewal or appointment;
|
| ― |
to ensure compliance by the Statutory Auditors on the conditions
of independence defined
by the French Commercial Code and tracks all related issues. Where applicable, in
consultation with the former, it determines measures to preserve their independence;
|
| ― |
to approve the provision by the Statutory Auditors of the services
mentioned in Article
L. 822-11-2 of the French Commercial Code.
|
To monitor the
fulfilment of the Statutory Auditors' mission:
it monitors how the Statutory Auditors perform their mission, and in particular
examines
their work programme, their findings and recommendations; it receives their additional
annual report on the results of the statutory audit of the financial statements;
It takes account of the findings and conclusions of the Statutory Auditors Audit
Council
(Haut conseil du Commissariat aux comptes) if controls are carried out in accordance
with the provisions of the French Commercial Code.
The committee can make any recommendation concerning its missions and powers.
It may review all questions particularly of a financial or accounting nature that
are submitted to it by the Chairman of the Board of Directors or Chief Executive Officer.
It reports on the performance of its duties to the Board of Directors."
♦ Activities of
the Audit Committee during 2018
The Audit Committee met seven times during 2018, including three joint sessions
with
the Risk Committee.
Each committee meeting was preceded by a conference call with the Finance Department.
Certain situations relating to the financial statements or the missions of the Statutory
Auditors were able to be clarified during telephone discussions. Specific phone conversations
were held with the Statutory Auditors.
During these meetings, the committee examined:
| ― |
the quarterly, interim and yearly consolidated corporate financial
statements;
|
| ― |
the work of the Statutory Auditors as well as the missions "outside
financial audit"
they performed;
|
| ― |
the 2018 and 2019 budgets;
|
| ― |
information published in the Registration Document;
|
| ― |
the documents and information expected by the committee in accordance
with Article
241 of the Decree of 3 November 2014 on internal control.
|
The minutes of each meeting were submitted to the Board of Directors.
The attendance rate of the members of the Audit Committee in 2018 was 93.87%.
► Attendance rate
of the members comprising the Audit Committee
|
|
Attendance rate of the members
comprising the Audit Committee |
Number of Audit Committee meetings
which each member attended in 2018 |
Attendance rate |
| Jacques BOYER (1) |
4 |
4 |
100.00% |
| Marie-Claire DAVEU |
7 |
7 |
100.00% |
| Claire DORLAND CLAUZEL |
7 |
6 |
85.7% |
| Anne-Laure NOAT |
7 |
6 |
85.7% |
| Jean-Pierre PAVIET (2) |
3 |
3 |
100.00% |
| Catherine POURRE |
7 |
6 |
85.7% |
| Jean-Pierre VAUZANGES |
7 |
7 |
100.00% |
(1)
Mr Boyer was appointed a member of the Committee by the Board on 4 May 2018.
(2)
Mr Paviet was not reappointed as a Director at the Annual General Meeting on 4 May
2018.
RISK COMMITTEE
♦ Composition
of the risk committee at 31 December 2018
The rules of procedures of the Board of Directors stipulate that the Risks Committee
is composed of at least four Directors.
MEMBERS AT 31
DECEMBER 2018
| ― |
Mrs Marie-Claire Daveu, Independent Director, Chairwoman of the
committee,
|
| ― |
Mrs Nicole Gourmelon, Director,
|
| ― |
Mrs Françoise Gri, Independent Director,
|
| ― |
Mrs Anne-Laure Noat, Independent Director,
|
| ― |
Mrs Catherine Pourre, Independent Director.
|
| ― |
Mr François Thibault, Director;
|
Mr François THIBAULT was appointed Committee member by the Board of Directors on
4
May 2018.
♦ Missions of
the risk committee
The Risks Committee meets whenever necessary, and at least once a quarter. It is
fully
informed about the Company's risks. If necessary, it may call on the services of the
head of risk management or external experts.
EXTRACT FROM THE
RULES OF PROCEDURES OF THE BOARD OF DIRECTORS
"The main missions of the Risk Committee are the following:
| ― |
To advise the Board of Directors on the Bank's overall strategy
and risk appetite
and to assist it when reviewing the implementation of this strategy by the Executive
Directors and by the head of the Risk Management function:
| ― |
to examine and review regularly the strategies and policies governing
decision-making,
management, monitoring, and reduction of the risks to which the Company is or could
be exposed;
|
| ― |
to review and monitor the risk management policy, procedures
and systems in force
within the Bank and its consolidated group;
|
| ― |
to assess the consistency of measurement, monitoring and risk
management systems,
and propose related actions, as necessary;
|
| ― |
to monitor any incident, whether fraudulent or not, revealed
by the internal control
procedures, according to the criteria and significance thresholds set by the Board
of Directors or which presents a major risk to the Bank's reputation; the Chairman
of the committee must be informed of any incident, whether fraudulent or not, revealed
by the internal control procedures, which exceeds an amount set by the Board of Directors
or which presents a major risk to the Bank's reputation;
|
|
| ― |
To consider whether the prices of the products and services offered
to clients are
in line with the risk strategy and, if this is not the case, to submit an action plan
to the Board of Directors to remedy the situation;
|
| ― |
Without prejudice to the responsibilities of the Compensation
Committee, to examine
whether the incentives offered by the Company's compensation policy and practices
are compatible with its situation with regard to the risks it is exposed to, its capital,
its liquidity and the probability and timing of the implementation of the benefits
expected;
|
| ― |
To review the effectiveness of internal control systems, excluding
the financial reporting
and accounting process covered by the Audit Committee:
| ― |
it examines the internal control system implemented within the
Company and its consolidated
group,
|
| ― |
it assesses the quality of internal control and proposes, as
necessary, complementary
actions,
|
| ― |
it monitors the work of the Statutory Auditors on the Company's
financial statements
and of the internal audit teams;
|
|
| ― |
To examine issues relating to liquidity risk and solvency;
|
| ― |
To examine issues relating to disputes and provisions."
|
♦ Activities of
the Risk Committee during 2018
The Risk Committee met seven times during 2018, including three joint sessions
with
the Audit Committee.
During these meetings, the committee examined:
| ― |
the risk position (quarterly review);
|
| ― |
liquidity (quarterly review);
|
| ― |
the emergency plan and the liquidity monitoring mechanism;
|
| ― |
the Company's risk appetite;
|
| ― |
risk strategies (quarterly review);
|
| ― |
the main legal issues (quarterly review);
|
| ― |
compliance reviews, including implementation of the OFAC remediation
plan (quarterly
review);
|
| ― |
the periodic control missions, including the 2019 audit plan;
|
| ― |
internal control review (half-yearly review);
|
| ― |
a report on the implementation of the law regulating banking
activities and the Volcker
rule;
|
| ― |
a summary of the work on the harmonised ICAAP and ILAAP and related
declarations;
|
| ― |
update on the implementation of MIFID 2;
|
| ― |
presentation of climate risks;
|
| ― |
update on the impacts of Basel IV;
|
| ― |
the declaration of the adequacy of the risk management mechanisms
set up.
|
In the course of preparing the work of the Audit and Risks Committees, several
meetings
were held:
| ― |
four conference calls with directors, executive management and
the other Bank departments;
|
| ― |
ten preparatory meetings with directors, executive management
and the other bank departments;
|
The minutes of each meeting were submitted to the Board of Directors.
The attendance rate of the members of the Risks Committee in 2018 was 91.83%.
► Attendance rate
of the members comprising the Risks Committee
|
|
Number of Risks Committee meetings
which each member should have attended in 2018 |
Number of Risks Committee meetings
which each member attended in 2018 |
Attendance rate |
| Marie-Claire DAVEU |
7 |
7 |
100.00% |
| Nicole GOURMELON |
7 |
6 |
85.7% |
| Françoise GRI |
7 |
7 |
100.00% |
| Anne-Laure NOAT |
7 |
5 |
71.42% |
| Jean-Pierre PAVIET (1) |
3 |
3 |
100.00% |
| Catherine POURRE |
7 |
6 |
85.7% |
| François THIBAULT (2) |
4 |
4 |
100.00% |
(1)
Mr Paviet was not reappointed as a Director at the Annual General Meeting on 4 May
2018.
(2)
Mr Thibault was appointed a member of the Committee by the Board on 4 May 2018.
During their joint sessions, the Audit Committee and the Risk Committee also examined:
| ― |
the Annual Report on Internal Control and Risk Measurement and
Monitoring 2017 (RACI)
and the 2018 half-yearly information on Internal Control (ISCI);
|
| ― |
the 2018 stress-test programme and the list of major risks;
|
| ― |
the presentation of the Information Systems Department;
|
| ― |
an update on personal-data processing;
|
| ― |
the criteria and thresholds applicable to significant incidents;
|
| ― |
regulatory provisions relative to ILAAP and ICAAP and supplement
on the Risk Framework;
|
| ― |
the 2019 budget;
|
| ― |
the mechanism set up by the Company to conform with MIFID2;
|
APPOINTMENTS AND
GOVERNANCE COMMITTEE
♦ Composition
of the Appointments Committee and Governance Committee at 31 December
2018
The Appointments and Governance Committee is composed of at least two Directors.
MEMBERS AT 31
DECEMBER 2018
| ― |
Mrs Claire Dorland Clauzel, Independent Director, Chairwoman
of the committee;
|
| ― |
Mrs Marie-Claire Daveu, Independent Director;
|
| ― |
Mr Luc JEANNEAU, Director
|
Mr Luc Jeanneau was appointed member of the Appointments and Governance Committee
on 4 May 2018 The Appointments and Governance Committee therefore has a majority of
Independent Directors in accordance with the provisions of the AFEP-MEDEF Code (§16.1).
The Chief Executive Officer and the Secretary of the Board are invited to the meetings
of this committee.
♦ Duties of the
Appointments and Governance Committee
EXTRACT FROM THE
RULES OF PROCEDURES OF THE BOARD OF DIRECTORS
"The principle missions of the Appointments and Governance Committee are:
| ― |
to assist the Council on matters relating to corporate governance
in order to maintain
a high level of requirements in this area;
|
| ― |
to identify and recommend suitable candidates, as Directors or
Non-voting Directors,
for the Board of Directors;
|
| ― |
to recommend to the Board of Directors candidates for the functions
of Chairman of
the Board;
|
| ― |
to assess once a year the balance, diversity of knowledge, skills
and experiences
that the Directors possess individually and collectively and when recommendations
are made to the Board for the appointment or reappointment of Directors;
|
| ― |
to define the qualifications needed to serve on the Board and
estimate how much time
should be set aside for the associated duties;
|
| ― |
to assist the Board with regard the strategies and objectives
applicable to Directors;
|
| ― |
to set a diversity target for the Board and develop a diversity
policy. This objective,
the policy and the means implemented are made public;
|
| ― |
to evaluate the structure, size, composition and effectiveness
of the Board of Directors
at least once a year;
|
| ― |
to review periodically and make recommendations regarding the
policies of the Board
of Directors for selection and appointment of Executive Directors of the Company and
other members of Executive Management, as well as the head of the Risk Management
function;
|
| ― |
to ensure that the Board of Directors is not dominated by one
person or by a small
group of people in conditions that could be detrimental to the Bank's interests".
|
♦ Actions of the Appointments and Governance Committee during 2018
The Appointments and Governance Committee met six times during 2018.
At its meetings, the committee:
| ― |
examined the candidatures and reappointments of Directors in
anticipation of the General
Meeting and the candidature for the new risk and Permanent Control Officer;
|
| ― |
examines the candidature of the new Chief Executive Officer and
the proposal for the
reappointment of the Deputy Chief Executive Officer.
|
| ― |
determined the objective and policy in terms of balanced representation
of men and
women on the Board of Directors as well as diversity;
|
| ― |
examined the qualification of independent administrator, and
the change in the composition
of the Board of Directors and its committees;
|
| ― |
examined the updated rules of procedures of the Board of Directors;
|
| ― |
examined the Directors' training programme for 2018, the proposed
training courses
for employed Directors and the annual seminar program;
|
| ― |
organised the self-assessment of the Board for 2018 and of the
individual and collective
skills of Directors. He analysed and synthesised the results of the self-assessments
in order to determine and submit the actions to be taken to the Board of Directors;
|
| ― |
readjusted its proposal for assessing the time required to perform
the various functions
on the Board of Directors and made an annual assessment of the time spent by each
director in the exercise of their mandate;
|
| ― |
checked, in accordance with Article L. 511-101 of the French
Monetary and Financial
Code, that the Board of Directors was not dominated by one person or by a group of
people in conditions that could be detrimental to the Company's interests;
|
The minutes of each meeting were submitted to the Board of Directors.
The attendance rate of the members of the Appointments and Governance Committee
in
2018 was 87.49%.
► Attendance rate
of the members of the Appointments and Governance Committee
|
|
Number of Appointments and Governance
Committee meetings which each member should
have attended in 2018
|
Number of Appointments and Governance
Committee meetings which each member attended
in 2018
|
Attendance rate |
| Marie-Claire DAVEU |
6 |
5 |
83.33% |
| Claire DORLAND CLAUZEL |
6 |
6 |
100.00% |
| François IMBAULT (1) |
3 |
2 |
66.66% |
| Luc JEANNEAU (2) |
3 |
3 |
100.00% |
(1)
Mr Imbault was not reappointed as a Director at the Annual General Meeting on 4 May
2018.
(2)
Mr Jeanneau was appointed a member of the Committee by the Board on 4 May 2018.
COMPENSATION COMMITTEE
♦ Composition
of the compensation committee at 31 December 2018
The rules of procedures of the Board of Directors stipulate that the Compensation
Committee is composed of at least four Directors and includes a Director representing
the employees, and one Director in common with the Risks Committee.
MEMBERS AT 31
DECEMBER 2018
| ― |
Mrs Anne-Laure Noat, Independent Director, Chairwoman of the
committee;
|
| ― |
Mr Jean de Dieu Batina, Director elected by the employees;
|
| ― |
Mrs Claire Dorland Clauzel, Independent Director;
|
| ― |
Mr Luc JEANNEAU, Director
|
Mr Luc Jeanneau was appointed member of the Compensation Committee on 4 May 2018
This committee, chaired by an Independent Director, has a total of four Directors,
including two Independent Directors, a Director representing employees and a Director
of the Crédit Agricole Group. This committee has a majority of Independent Directors
in accordance with the provisions of the AFEP-MEDEF Code (Recommendations No. 14.1
and 17.1).
The Compensation Committee's duties fall within the framework of the Group's compensation
policy. With a view to harmonising Crédit Agricole S.A.'s compensation policies, the
Group Human Resources Director or his or her representative, as well as the Chairman
of the Board of Directors and the Chief Executive Officer of Crédit Agricole S.A.,
are invited to the meetings of the Compensation Committee. An overall monitoring of
the compensation policy applicable across all Crédit Agricole Group S.A. entities
is carried out within Crédit Agricole S.A. This follow-up is presented to the Board
of Directors of Crédit Agricole S.A. and includes proposals for the principles used
to determine the amounts of variable remuneration, the examination of the impact of
the risks and the capital requirements inherent to the activities concerned, as well
as an annual review, by the Compensation Committee of the Crédit Agricole S.A. Board,
of compliance with regulatory provisions and professional standards on compensation.
♦ Missions of
the compensation Committee
EXTRACT FROM THE
RULES OF PROCEDURES OF THE BOARD OF DIRECTORS
"The Compensation Committee prepares the decisions of the Board of Directors regarding
compensation, in particular those having an impact on risk and risk management in
the Company, it assists in the development of compensation policies and the supervision
of their implementation.
It makes recommendations
to the Board including:
| ― |
the total amount of Directors' fees allocated to the members
of the Board of Directors,
to be submitted to the General Meeting of Shareholders for approval;
|
| ― |
the distribution of these Directors' fees among the members of
the Board of Directors;
|
| ― |
ordinary and exceptional compensation, defined in Article 14
of the Articles of Association
as "Directors' compensation" paid to the members of the Board of Directors, its Chairman
and its Vice-Chairmen.
|
| ― |
At least annually, it reviews:
|
| ― |
the principles of the Company's compensation policy;
|
| ― |
the compensation, allowances, benefits in kind granted first
to the Chief Executive
Officer, and then to the Deputy CEOs on the proposal of the CEO;
|
| ― |
the principles of variable compensation of all employees of the
Company including
those identified personnel defined in compliance with European regulations, as well
as the members of Executive Management (composition, base, ceiling, conditions, form
and payment date) and the total amount paid as variable compensation; the Compensation
Committee is informed of the breakdown of this total at individual level, beyond a
threshold proposed by Executive Management and subject to approval by the Board of
Directors.
|
It also carries
out the following:
| ― |
it ensures that the compensation system takes into account any
type of risk and liquidity
and equity levels and that the overall compensation policy is consistent, that it
promotes sound and effective risk management and that it is consistent with the business
strategy objectives, corporate values as well as the Company's long-term interests;
|
| ― |
it prepares the work and decisions of the Board of Directors
to identify staff defned
in compliance with the European identification rules;
|
| ― |
it reports to the Board of Directors on its annual review of
the compensation policy
and principles, as well as the verification of their compliance with applicable regulations
and proposes changes as necessary;
|
| ― |
it controls the compensation of the risk management and compliance
officers as well
as that of the periodic control officer;
|
| ― |
regarding deferred variable compensation, it evaluates the achievement
of performance
targets and the need for an adjustment to the ex post risk, including application
of penalties and recovery plans, in compliance with the regulations in force;
|
| ― |
it ensures that the Company's policy and compensation practices
are subject to an
assessment by periodic control at least once per year, it reviews the results of this
evaluation and the corrective measures implemented and it makes any recommendation;
|
| ― |
it examines draft reports on compensation including Corporate
Officers and Executive
Directors, prior to their approval by the Board of Directors".
|
♦ Activities of
the Compensation Committee during 2018
The Compensation Committee met five times during 2018.
These meetings focused primarily on the following matters:
| ― |
determination of the total variable compensation budget;
|
| ― |
examination of the compensation of executive corporate officers,
setting the criteria
used to determine compensation and benefits in kind, review conditional rights and
performance conditions relating to the retirement plans for corporate officers;
|
| ― |
examination of the compensation of managers of control functions;
|
| ― |
Annual review of the Group's compensation policy;
|
| ― |
review of the reports required by law presenting the information
on the compensation
policy and practices inside the Company;
|
| ― |
review of the part of the management report and draft resolutions
concerning compensation
to be presented to the Shareholders' General Meeting;
|
The minutes of each meeting were submitted to the Board of Directors.
The attendance rate of the members of the Compensation Committee in 2018 was 76.66%.
► Attendance rate
of members comprising...
|
|
Number of Compensation Committee
meetings which each member should have attended in
2018
|
Number of Compensation Committee
meetings which each member attended in 2018 |
Attendance rate |
| Jean de Dieu BATINA |
5 |
5 |
100.00% |
| Claire DORLAND CLAUZEL |
5 |
3 |
60.00% |
| François IMBAULT (1) |
2 |
2 |
100.00% |
| Luc JEANNEAU (2) |
3 |
3 |
100.00% |
| Anne-Laure NOAT |
5 |
5 |
100.00% |
(1)
Mr Imbault was not reappointed as a Director at the Annual General Meeting on 4 May
2018.
(2)
Mr Jeanneau was appointed a member of the Committee by the Board on 4 May 2018.
1.3 OTHER INFORMATION
CONCERNING CORPORATE OFFICERSX
1.3.1 List of
the functions and mandates held by the Executive Corporate Officers
at 31 December 2018
MEMBER OF THE
EXECUTIVE MANAGEMENT
Jacques RIPOLL
› BORN in 1966
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2018
END OF TERM OF OFFICE | Indefinite term of office | Does not hold any shares in
the
Company
Main office within Crédit Agricole CIB in 2018: Chief Executive Officer
Business address: 12, place des Etats-Unis - CS 70052-92547 Montrouge Cedex
› BRIEF BIOGRAPHY
A graduate of the Ecole Polytechnique, Jacques Ripoll joined Société Générale in
1991
in the General Inspectorate, and moved to the Equity Derivatives department in 1998.
He became head of sales and trading for European equities in 2003, and Director of
Strategy for the bank between 2006 and 2009. He then joined the Executive Committee
of Société Générale in charge of four business lines: Asset Management, Private Banking,
Investor Services and Newedge.
In 2013, Jacques Ripoll moved to Banco Santander as Head of Investment Banking
for
the United Kingdom. In 2015, he was appointed Senior Executive Vice President of the
Santander Group in charge of investment banking worldwide.
On 1 November 2018 he was appointed Chief Executive Officer of Crédit Agricole
CIB,
and he also became Deputy General Manager of Crédit Agricole S.A. responsible for
the Large Customers division, for Corporate and Investment banking, Wealth Management
(CA Indosuez Wealth Group) and services for institutional investors and businesses
(CACEIS).
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Deputy General Manager: Crédit Agricole S.A. - Member of the
Management Committee
and the Executive Committee
|
| ― |
Chairman: CACEIS; CACEIS Bank
|
In companies outside Crédit Agricole Group and whose shares are admitted for trading
on a regulated market
In other companies outside Crédit Agricole Group
| ― |
Director: Beyond Ratings
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
| ― |
Groupe Santander:
| ― |
Senior Executive Vice President in charge of worldwide investment
bank (2015-2017)
|
| ― |
Head of investment banking in the United Kingdom (2013-2015)
|
|
François MARION
› BORN in 1958
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2016
END OF TERM OF OFFICE | Indefinite term of office | Does not hold any shares in
the
Company
Main office within Crédit Agricole CIB in 2018: Deputy Chief Executive Officer
Business address: 12, place des Etats-Unis - CS 70052-92547 Montrouge Cedex
› BRIEF BIOGRAPHY
A graduate of HEC, François Marion spent a significant part of his career within
Crédit
Agricole Indosuez, first at Banque Indosuez, which he joined in 1983, in the Control
and Audit function, then in 1985 in New York, where he was responsible for all banking
support functions. In 1992, he was appointed Chief Operating Officer for all of the
Group's Asia-Pacific units. In 1997, he returned to Paris, where he was responsible
for all financial control, budgeting and strategic planning at Crédit Agricole Group
Indosuez, becoming a member of the Executive Committee and Director of Systems and
Operations in 1999. From June 2004, he was appointed Chief Executive Officer of Crédit
Agricole Investor Services. He became Chairman of the Management Committee of CACEIS
upon its creation in 2005, then its Chief Executive Officer in 2009. He has been Deputy
Chief Executive Officer of Crédit Agricole CIB since 18 May 2016.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Permanent representative of Crédit Agricole CIB: Director of
LESICA (SAS)
|
| ― |
Non-voting Director: CA-GIP
|
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
| ― |
Chairman and Chief Executive Officer: SICOVAM Holding
|
| ― |
Director: Euroclear PLC
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Chief Executive Officer: CACEIS (2016)
|
In companies outside Crédit Agricole Group
BOARD OF DIRECTORS
Philippe BRASSAC
› BORN IN 1959
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2010
END OF TERM OF OFFICE | Indefinite term of office | Does not hold any shares in
the
Company
Office held in Crédit Agricole CIB in 2018: Chairman of the Board of Directors
Business
address: 12, place des Etats-Unis 92127 Montrouge Cedex France
› BRIEF BIOGRAPHY
A graduate of the Paris Graduate School of Economics, Statistics and Finance (ENSAE),
Philippe Brassac joined Crédit Agricole du Gard in 1982. He held several executive
offices there before being appointed, in 1994, Deputy General Manager of Crédit Agricole
des Alpes-Maritimes, now Crédit Agricole Provence Côte d'Azur. In 1999, he joined
Caisse Nationale de Crédit Agricole as Director of relations with Regional Banks.
In 2001, he was appointed Chief Executive Officer of Crédit Agricole Provence Côte
d'Azur. In 2010, he also became Secretary General of the Federation Nationale du Crédit
Agricole (FNCA) and Deputy Chairman of the Board of Directors of Crédit Agricole S.A..
In May 2015, he was appointed Chief Executive Officer of Crédit Agricole S.A.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chief Executive Officer of Crédit Agricole S.A.
|
| ― |
Chairman: LCL
|
| ― |
Director: Fondation du Crédit Agricole Pays de France
|
In companies outside Crédit Agricole Group and whose shares are admitted for trading
on a regulated market
In other companies outside Crédit Agricole Group
| ― |
Member of the Executive Committee of the French Banking Federation
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Corporate Secretary: FNCA (2015)
|
| ― |
Board member: FNCA (2015)
|
| ― |
Chief Executive Officer: Caisse regionale Provence Côte d'Azur
(2015)
|
| ― |
Director and Deputy Chairman: Crédit Agricole S.A. (2015), SAS
Rue La Boétie (2015)
|
| ― |
Director: LCL (2015), Fédération régionale du CAM (2015), SCI
CAM (2015), ADICAM (2015)
|
| ― |
Chairman: Sofipaca Gestion and Sofipaca (2015), SACAM Développement
(2015)
|
| ― |
Chief Executive Officer: SACAM International (2015)
|
| ― |
Chief Executive Officer and Director: SACAM Participations (2015)
|
In companies outside Crédit Agricole Group
Jean de Dieu BATINA
› BORN IN 1962
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2017
END OF TERM OF OFFICE | 2020 | Does not hold any shares in the Company
Office held in Crédit Agricole CIB in 2018: Director representing employees
Member of the Compensation Committee
Business address: 12, place des Etats-Unis - CS 70052-92547 Montrouge Cedex
› BRIEF BIOGRAPHY
With a PhD in Economics from the University of Paris 2, a post-graduate degree
(DEA)
in Econometrics and Finance, a degree from ESSEC (Strategic Marketing Certificate),
Jean de Dieu Batina began his career within the Crédit Agricole Group at Crédit Agricole
Assurances-Prédica, as head of Economic, Statistical and Commercial Research, then
at Indosuez at the Corporate Secretary - Information Centre, and at the Banking Operations
Department. He joined Crédit Agricole CIB firstly in Cash Management, then with the
Foreign Delegations Network, before moving to International Business Solutions.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
Jacques BOYER
› BORN IN 1953
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2018
END OF TERM OF OFFICE | 2019 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Member of the Audit Committee
Business address: CRCAM du Languedoc- avenue de Montpelliéret - Maurin - 34977
LATTES
- France
› BRIEF BIOGRAPHY
Manager of a wine producing company in the Languedoc for many years, Jacques Boyer
joined the Crédit Agricole S.A Group since 1977.
After serving as Vice-Chairman of the Caisse Regional du Midi, Jacques Boyer became
Chairman of the Crédit Agricole Regional Bank in Languedoc in 2011. At the same time,
he has numerous responsibilities and positions within the Crédit Agricole Group and
holds several offices within Group subsidiaries.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chairman: CRCAM du Languedoc
|
| ― |
Director: Consumer Finance; Crédit Agricole Immobilier SCICAM;
SACAM Participation;
SAS Rue la Boétie
|
| ― |
Member of the Management Committee: GIE GECAM
|
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
| ― |
Director: Groupe AGRICA; AGRICA Gestion; CCPMA Prévoyance; Section
professionnelle
AGRICA Retraite AGIRC; Section professionnelle AGRICA Retraite ARRC
|
| ― |
Manager: SARL Jacques Boyer, SCEA Jacques et Francoise Boyer,
JBH Holding
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
Audrey CONTAUT
› BORN IN 1992
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2017
END OF TERM OF OFFICE | 2020 | Does not hold any shares in the Company
Office held in Crédit Agricole CIB in 2018: Director (Director representing employees)
Business address: 12, place des Etats-Unis - CS 70052-92547 Montrouge Cedex - France
› BRIEF BIOGRAPHY
A graduate of ESC School of Commerce Troyes, Audrey Contaut began her career at
Crédit
Agricole CIB in March 2015, when she joined OPC (Operation & Country COOs), first
as a Back-Office Derivatives and Payments manager then as a Back-Office Equity Division
& Collateral Derivatives Payments manager. Since November 2018, Audrey Contaut
has
been a KYC analyst for RPC (Risk and Permanent Control).
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
Bertrand CORBEAU
› BORN IN 1959
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2016
END OF TERM OF OFFICE | 2021 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Business address: 12, place des Etats-Unis- 92127 Montrouge Cedex - France
› BRIEF BIOGRAPHY
A graduate of the Institut technique de Banque, the Institut national de Marketing
and the INSEAD business school, Bertrand Corbeau has spent his entire career at Crédit
Agricole, first at Crédit Agricole de la Mayenne in 1981 then at the Anjou-Mayenne
and the Anjou and Maine Regional Banks, as Commercial Director. In 2003, he joined
Crédit Agricole in Franche-Comté as Deputy General Manager. In 2006, he was called
to take up the same position at Crédit Agricole de Val-de-France. He became Chief
Executive Officer of Crédit Agricole in Franche-Comté in 2007. In 2010, he was appointed
Chief Executive Officer of the Fédération nationale du Crédit Agricole, remaining
in this position until 2016. He was appointed Deputy General Manager of Crédit Agricole
S.A. responsible for the Development, Client and Innovation business, on 4 April 2016
and is a member of the Executive Committee.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Deputy General Manager of Crédit Agricole S.A.
|
| ― |
Chairman: UNI-MEDIAS, Commission gestion provisoire de la Caisse
régionale de Corse
|
| ― |
Director: FIRECA, PACIFICA, PREDICA,CA payment Services
|
| ― |
Member of the Supervisory Board: CARD, CAIT
|
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
CEO of FNCA, SACAM Participations, CA village de l'innovation
|
| ― |
Director: ACBA CA, GEFOCAM, BFORBANK,
SACAM Participations,
CA Indosuez Wealth (France) (2017),
CA Indosuez Wealth (Group) (2017),
CA Immobilier (2017), IFCAM (2018)
|
| ― |
Non-voting Director: PACIFICA, PREDICA
|
| ― |
Permanent representative of FNCA - Director: Crédit Agricole
Store, GECAM (GIE)
|
| ― |
Non-voting Director: SCI CAM
|
In companies outside Crédit Agricole Group
Marie-Claire DAVEU
› BORN IN 1971
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2014
END OF TERM OF OFFICE | 2020 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Chairwoman of the Risk Committee - Member of the Audit Committee - Member of the
Appointments
and Governance Committee
Business address: 40, rue de Sevres - 75007 Paris - France
› BRIEF BIOGRAPHY
Graduate of Institut national agronomique Paris-Grignon (1995), École nationale
de
genie rural des eaux et forêts (1997) with a Master of Advanced Studies (DESS) in
Public Administration (Université Paris-Dauphine - 1997), Marie-Claire Daveu began
her career as a high-ranking civil servant within the Départemental directorate for
agriculture and forestry of La Manche, before moving to the Ministry of Urban Planning
and Environment. In 2004, she became Cabinet Director at the Ministry for Ecology
and Sustainable Development. From 2005 to 2007, she was head of Sustainability at
the Sanofi-Aventis Group. From 2007 to 2012, she was Cabinet Director first within
the Ministry of State in charge of Ecology, then Ministry of State in charge of strategic
studies and the digital economy before joining the Ministry of Ecology, Sustainable
Development, Transport and Housing. Since 2012, she has been head of Sustainability
and International Institutional Affairs at the Kering Group and a member of the Executive
Committee.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
| ― |
Member of the Executive Committee (Director of Sustainable Development
and international
institutional business): Kering
|
| ― |
Director: ALBIOMA S.A. Compagnie du Ponant
|
In other companies outside Crédit Agricole Group
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Member of the Supervisory Board: SAFT Groupe S.A.(2018)
|
In companies outside Crédit Agricole Group
Claire DORLAND CLAUZEL
› BORN IN 1954
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2016
END OF TERM OF OFFICE | 2019 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Chairwoman of the Appointments and Governance Committee - Member of the Audit Committee
Member of the Compensation Committee
Business address: 12, place des Etats-Unis - CS 70052 - 92547 Montrouge Cedex -
France
› BRIEF BIOGRAPHY
Holder of a Master's degree in history from Université Paris Sorbonne and a Doctorate
from Institut de Geographie, and a graduate of École Nationale d'Administration (1988
"Montaigne" cohort), Claire Dorland Clauzel began her career at the Ministry of Agriculture
before joining the Ministry of Economy and Finance, Treasury Department, in 1988.
She was appointed Deputy head of Finance for the Usinor Group from 1993 to 1995 and
became Cabinet Director of the Director of the Treasury in 1995. In 1998, she joined
AXA as head of Audit and Control of AXA France, where she was also a member of the
Executive Committee. She was appointed Chief Executive Officer of AXA France Support
in 2000 before becoming head of Communication, Branding and Sustainability of the
AXA Group and a member of the Executive Committee in 2003. In 2008, she joined the
Michelin Group as head of Communications and Branding. From 2014 to 2018, she was
Head of Brands, External Relations and Maps and Guides of the Michelin Group; she
was also Head of Sustainable Development from 2017 to 2018 and member of the Executive
Committee. Since 2018, she has been joint-director of a vineyard.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
| ― |
Manager: SCI La Tuilière
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Member of the Executive Committee: (Director of Branding and
External Relations):
Michelin group (2018)
|
| ― |
Director: Union des annonceurs, Union des fabricants (2018)
|
In companies outside Crédit Agricole Group
Olivier GAVALDA
› BORN IN 1963
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2016
END OF TERM OF OFFICE | 2019 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Business address: CRCAM Paris Ile de France- 26, quai de la Rapée - 75596 PARIS
Cedex
- France
› BRIEF BIOGRAPHY
Olivier Gavalda holds a Master's degree in Econometrics and a DESS Arts and Metiers
in organisation / computer science and has spent his entire career at Crédit Agricole.
In 1988 he joined Crédit Agricole du Midi where he was Organisation Project Manager,
then Branch Manager, then Training Manager and finally Head of Marketing. In 1998,
he joined Crédit Agricole in Ile-de-France as Regional Manager. In 2002, he was appointed
Deputy General Manager of Crédit Agricole Sud Rhone-Alpes responsible for Development
and Human Resources. On 1 January 2007, he was appointed Chief Executive Officer of
Crédit Agricole in Champagne Bourgogne. In March 2010, Olivier Gavalda became Head
of the Regional Banks Division within Crédit Agricole S.A. In 2015, he was appointed
Deputy General Manager responsible for the Development, Client and Innovation Division
of Crédit Agricole S.A. Since 4 April 2016, he has been Chief Executive Officer of
the Crédit Agricole Paris and Paris Region Regional Bank division.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chief Executive Officer: CRCAM Paris Ile-de-France.
|
| ― |
Chairman: Crédit Agricole SRBIJA
|
| ― |
Director: CA Payement Services; Crédit Agricole Capital Investissement
et Finances;
CAMCA; Crédit Agricole Technologie et Service;
|
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Deputy General Manager: Crédit Agricole S.A. (2016)
|
| ― |
Chairman: GIE Cartes bancaires (2016)
|
| ― |
Director: Prédica (2015); Pacifica (2015)
|
In companies outside Crédit Agricole Group
Nicole GOURMELON
› BORN IN 1963
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2016
END OF TERM OF OFFICE | 2019 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Member of the Risk Committee
Business address: CRCAM Atlantique Vendée- Route de Paris la garde - 44949 Nantes
Cedex 9
› BRIEF BIOGRAPHY
A graduate of the Institut technique de Banque, Nicole Gourmelon has spent all
of
her career at the Crédit Agricole Group. She held several executive positions at Caisse
régionale du Finistère from 1982 to 1998, before joining Caisse régionale de Charente
Périgord in 1999 as head of Business Development, Corporate Affairs, Marketing and
Client Communication. From 2002 to 2004, she was head of Finance, Strategic Marketing
and Communication for the Caisse régionale d'Aquitaine, then Deputy General Manager
of the Caisse régionale de Normandie from 2004 to 2008. She was Deputy General Manager
of PREDICA from 2009 to 2010 before being appointed Chief Executive Officer of Caisse
régionale de Normandie in 2011. She also holds various positions and responsibilities
within the national bodies of the Crédit Agricole Group as a member of Committees
and in several Group subsidiaries Since January 1, 2019, she has held the position
of Director General of Regional Banks Atlantique-Vendée.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chief Executive Officer: CRCAM de Normandie, Sofinormandie
|
| ― |
Chairwoman: PACIFICA
|
| ― |
Permanent representative:
|
| ― |
CRCAM Normandie: Chairwoman UNEXO,
|
| ― |
Director Britline
|
| ― |
SACAM Développement - Director LCL,
|
| ― |
SACAM Participations - Director PREDICA
|
| ― |
Director: CA Assurances
|
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In companies outside Crédit Agricole Group
| ― |
Director: Normandie Attractivité
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Chairwoman: CA Immobilier Normandie (2016),
|
| ― |
Director: Credit Agricole Egypt (2016), CAMCA Insurance (2016),
CAMCA Courtage (2016),
ADICAM (2017)
|
In companies outside Crédit Agricole Group
Françoise GRI
› BORN IN 1957
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2017
END OF TERM OF OFFICE | 2020 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Member of the Risk Committee
Business address: 12, place des Etats Unis - 92127 Montrouge Cedex - France
› BRIEF BIOGRAPHY
A graduate of the National School of Computer Science and Applied Mathematics of
Grenoble,
Françoise Gri began her career within the IBM group in 1981 and became Chairwoman
and Chief Executive Officer of IBM France in 2001. In 2007, she joined Manpower and
held the position of Chairwoman and Chief Executive Officer of the French subsidiary,
before becoming Executive Vice President of the Southern Europe area of ManpowerGroup
(2011). An accomplished leader with extensive international experience, she then joined
the Pierre & Vacances-Center Parcs Group as Chief Executive Officer (2012-2014).
An
Independent Director, she has expertise in the fields of IT and corporate social responsibility.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Independent Director: Crédit Agricole S.A. (Chairwoman: Risk
Committee, Risk Committee
in the United States; Member: Audit Committee, Strategy and CSR Committee, Compensation
Committee)
|
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
| ― |
Independent Director: Edenred SA, WNS Services (member of the
Audit Committee)
|
In companies outside Crédit Agricole Group
| ― |
Manager F. Gri Conseil
|
| ― |
Independent Director: 21 centrale Partners, Ecole Audencia
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
| ― |
Chief Executive Officer: Pierre et Vacances-Center Parcs Group
(2014)
|
| ― |
Chairwoman of the Board of Directors: Viadeo (2016)
|
| ― |
Deputy Chairwoman: Institut de l'entreprise (2015)
|
| ― |
Member: Haut Comité du Gouvernement d'Entreprise; MEDEF Ethics
Committee (2016); Institut
français du tourisme (2015)
|
Luc JEANNEAU
› BORN IN 1961
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2017
END OF TERM OF OFFICE | 2020 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Member of the Compensation Committee and the Appointments and Governance Committee
Business address: CRCAM Atlantique Vendée - Route de Paris la Garde - 44949 Nantes
cedex 9
› BRIEF BIOGRAPHY
Luc Jeanneau has been at the head of a farming business on the island of Noirmoutier
since 1985. In 1990, he became Director of the Crédit Agricole Local Bank in Noirmoutier,
then, in 1993, Director of Caisse Régionale de la Vendee, and Director of Caisse Régionale
Atlantique Vendée, where he has acted as Deputy Chairman in 2010. He has been its
Chairman since 1 April 2011. At the same time he holds various positions and responsibilities
within the Crédit Agricole Group, in particular as a member of the Group's commissions
or committees, and holds several offices within the Group's subsidiaries.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chairman: CRCAM Atlantique-Vendée
|
| ― |
Vice-Chairman: CAMCA Mutuelle; CAMCA Assurance Reassurance
|
| ― |
Director: Local bank de Noirmoutier;
SAS Rue la Boetie SACAM Participation;
ADICAM,
SCI CAM;
|
| ― |
Member of the Supervisory Board: CAMCA Courtage
|
| ― |
Member of the Executive Committee: GIE GECAM
|
| ― |
Member of the Management Board: SACAM Mutualisation
|
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
In other companies outside Crédit Agricole Group
| ― |
Manager: EARL Les Lions
|
| ― |
Director: Coopérative des producteurs de noirmoutier; Comité
interprofessionnel de
la pomme de terre; Felcoop Coopérative
|
| ― |
Chairman: Association des Saveurs de l'Ile de Noirmoutier
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Director: CAMCA Vie (2016), AMUNDI (Member of the Audit Committee)
(2015), SACAM Assurances
Caution
|
In companies outside Crédit Agricole Group
Anne-Laure NOAT
› BORN IN 1964
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2014
END OF TERM OF OFFICE | 2020 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Chairwoman of the Audit Committee and the Compensation Committee and member of
the
Risk Committee
Business address: Europgroup Consulting- Tour Vista - 52/54 quai de Dion Bouton
-
92800 Puteaux - France
› BRIEF BIOGRAPHY
An agronomic engineer and graduate of Institut national agronomique Paris Grignon
(1983) and the ESSEC business school (1988), Anne-Laure Noat began her career at Crédit
Lyonnais in Japan in 1988. She joined Eurogroup Consulting in 1990 where she has been
a partner since 2000, head of development of the Transportation sector, and associate
HRD since September 2012 and a member of the EXCOM since 2018. She develops Eurogroup
Consulting's business in the transportation and logistics sectors, notably as regards
industry policy, strategic projects and industrial and managerial performance. She
also specialises in corporate governance consulting: corporate-function performance
(legal, communication, HR), business strategy, forward management of jobs and skills,
steering and management control, change management and corporate project deployment
and is in charge of the Responsible Company and Economy practice.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group and whose shares are admitted for trading
on a regulated market
In other companies outside Crédit Agricole Group
| ― |
Partner and member of EXCOM: Eurogroup Consulting France
|
| ― |
Chairwoman: DDS SAS (subsidiary of Eurogroup Consulting), NEW
DDS SAS (subsidiary
of Eurogroup Consulting)
|
| ― |
Chairwoman of the HR and Business Committee of Union Internationale
des Transports
Publics and a member of the Policy Board
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
| ― |
Chairwoman: Association AgroParis Tech Alumni
|
| ― |
Director: Uniagro; AgroParis Tech (EPC SCP), La maison des ingénieurs
agronomes (2018)
|
| ― |
Member: Board of ParisTech Alumni
|
Catherine POURRE
› BORN IN 1957
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2017
END OF TERM OF OFFICE | 2021 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Member of the Audit Committee and the Risk Committee
Business address: 12, place des Etats Unis - 92127 Montrouge Cedex - France
› BRIEF BIOGRAPHY
A graduate of the ESSEC business school and a Certified Accountant, with a degree
in business law from the Catholic University of Paris, Catherine Pourre has extensive
experience in audit and organisation consulting, particularly as a partner at PricewaterhouseCoopers
(1989-1999) then at Cap Gemini Ernst & Young France, where she became Executive
Director
in 2000. She joined Unibail-Rodamco from 2002 as Deputy General Manager. She carried
out various executive management functions as member of the Executive Committee then
member of the Management Board. She is currently a corporate officer within various
companies in France and Luxembourg.
› OFFICES HELD AT 31 DECEMBER 2018
In companies outside Crédit Agricole Group whose shares are admitted for trading
on
a regulated market
| ― |
Director: Crédit Agricole S.A. (Chairwoman of the Audit Committee,
Member of the Risk
Committee)
|
In companies outside Crédit Agricole Group and whose shares are admitted for trading
on a regulated market
| ― |
Permanent representative of Fonds Stratégique de Participation:
Director SEB (Chairwoman
of the Control Committee)
|
| ― |
Member of the Supervisory Board (member of Audit Committee and
the Compensation Committee):
Bénéteau
|
In other companies outside Crédit Agricole group
| ― |
Manager of CPO Services (Lux)
|
| ― |
Member: Board Women Partners, Royal Ocean Racing Club, association
Class 40 (Treasurer)
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
| ― |
Deputy Chief Executive Officer: Unibail Management (2014)
|
| ― |
Director: Neopost (member of Audit Committee and chairwoman of
Compensation Committee)
|
| ― |
Chairwoman: Union Nationale pour la Course au Large (UNCL) (2015)
|
| ― |
Member of the Board of Directors: Unibail-Rodamco Management
BV (2015)
|
François THIBAULT
› BORN IN 1955
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2010
END OF TERM OF OFFICE | 2019 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Member of the Risk Committee
Business address: CRCAM Centre Loire- 8 allée des Collèges - 18000 Bourges
› BRIEF BIOGRAPHY
An agricultural engineer, farmer and viticulturist by profession, François Thibault
is a long-standing elected member of Crédit Agricole's working bodies. Chairman of
the Cosne-sur-Loire (Nièvre) Local Bank from 1991 to 1996, when he became Director,
later Chairman, of Caisse régionale Centre Loire. He also holds several responsibilities
within the Group's national bodies in particular, as the Chairman of Federal Committees
and within specialised subsidiaries.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chairman: CRCAM Centre Loire; CAMCA, CAMCA Courtage, SAS Centre
Loire Expansion,
|
| ― |
Director: Crédit Agricole S.A. (Member: Strategy and CSR Committee,
Risk Committee),
Car Centre,
|
In companies outside Crédit Agricole Group and whose shares are admitted for trading
on a regulated market
In other companies outside Crédit Agricole Group
| ― |
Partner: of Gaec Thibault, GFA Villargeau d'en Haut, GFA de Montour,
SCI Loire and
Fontbout
|
| ― |
Director: CNMCCA
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Chairman: Carcentre (GIE) (2014), SAS Pleinchamp (2016), Foncaris
(2016)
|
| ― |
Director: CA Bank Polska (2016)
|
In companies outside Crédit Agricole Group
Odet TRIQUET
› BORN IN 1962
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2018
END OF TERM OF OFFICE | 2021
Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Business address: CRCAM Touraine Poitou- 18 rue Salvador Allende - 86 008 POITIERS
cedex
› BRIEF BIOGRAPHY
Odet Triquet has been running a farm specializing in cereals and goat farming since
1989. He joined the Crédit Agricole Group in 1992 as a director of the Crédit Agricole
regional bank in Civray. He became its Chairman in 1997, The same year he became a
director of the Crédit Agricole regional banks in Touraine and Poitou. He was appointed
Vice-Chairman of the Regional bank in 2000 and then Chairman in March 2012. He also
holds several responsibilities within the Group's national bodies in particular, on
Federal Committees and within Group subsidiaries.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chairman: CRCAM Touraine Poitou
|
| ― |
Director: GIE CAR Centre, BFORBANK (Member of the Audit Committee),
FIRECA.
|
| ― |
Member of the Management Board: CA Titres
|
In companies outside Crédit Agricole Group whose shares are listed on a regulated
market
In other companies outside Crédit Agricole Group
| ― |
Director: CCPMA Prévoyance; Réunion d'information commune (Groupe
AGRICA and AGRICA
Gestion;
|
| ― |
Co-manager: GAEC des Panelières
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
Jean-Pierre VAUZANGES
› BORN IN 1957
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2013
END OF TERM OF OFFICE | 2020 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Director
Member of the Audit Committee
Business address: CRCAM Ile-et-Vilaine- 4, rue Louis Braille - 35136 Saint-Jacques
de La Lande - France
› BRIEF BIOGRAPHY
A civil engineer specialising in maritime engineering with a Master's degree in
general
physics and a graduate of the INSEAD business school, Jean-Pierre Vauzanges began
his career as a design engineer at Chantiers du Nord et de la Méditerranée. In 1995,
he joined AGF Group as Deputy General Manager of Mondial Assistance France, becoming
Chief Executive Officer two years later, then Chairman at the same time as being appointed
Chairman of GTS Télé-assistance. In 2002, he was headhunted by Groupama where he worked
in management roles in Normandy, then in Rhône-Alpes-Auvergne. He joined the Crédit
Agricole Group in 2004 as Deputy General Manager of Pacifica in charge of operations
and was appointed Chairman of the Eurofactor Management Board in 2007. He then joined
the Crédit Agricole S.A. Executive Committee in September 2008 to take over the Regional
Banks business. In 2010, he became Chief Executive Officer of Caisse régionale de
Charente-Périgord, then, in 2014, he became Chief Executive Officer of Caisse régionale
d'Ille-et-Villaine.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chief Executive Officer: CRCAM d'Île-et-Vilaine
|
| ― |
Director: Uni Medias; Fondation Crédit Agricole solidarité développement
|
In companies outside Crédit Agricole Group whose shares are listed on a regulated
market
In other companies outside Crédit Agricole Group
| ― |
Chairman: SGAPS, AGRICA PRÉVOYANCE
|
| ― |
Director Groupe AGRICA; Agrica retraite AGRICA gestion; AGIRC;
CCPMA Prévoyance; HLM
de la Rance
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Chief Executive Officer: Caisse régionale de Crédit Agricole
Mutuel Charente-Périgord
|
| ― |
Chairman: Prédica (SAS), ANCD (2016), Square achat (SAS) (2018)
|
| ― |
Member of the Executive Committee: SACAM Fireca
|
| ― |
Permanent representative of CRCAM Charente-Perigord: Grand Sud-Ouest
Capital
|
| ― |
Director: CA Services; CA Technologies; Pleinchamp PACIFICA (2016),
Crédit Agricole
Assurances (2016), CAMCA Assurances (2016), CAMCA Reassurance (2016), CAMCA Vie (2016),
CA Serbie (2016), CAMCA Mutuelle (2016), CAMCA Courtage (2015)
|
In companies outside Crédit Agricole Group
Permanent representative of CRCAM Charente-Perigord: Charente Perigord Expansion
(2014)
| ― |
Director: AGRICA CCMA Prévoyance
|
Paul CARITE
› BORN IN 1961
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2018
END OF TERM OF OFFICE | 2021 | Holds one share in the Company
Office held in Crédit Agricole CIB in 2018: Non-voting Director
Business address: CRCAM Sud Méditerranée - 30, rue Pierre Bretonneau - 66832 Perpignan
› BRIEF BIOGRAPHY
Paul Carite graduated from Toulouse Business School and began his career in 1986
at
Société Générale. He joined the Crédit Agricole du Lot et Garonne in 1991 where he
was appointed Head of Corporate Market Services, IAA and Public Corporations. He then
moved to the Crédit Agricole Regional Bank of Gironde as Director of the Corporate
Market Services, Public Bodies, Agriculture and Professionals. Between 2001 and 2005,
Paul Carite was Director of Business and Private Management and then Director of Distribution
for Crédit Agricole Regional Bank of Aquitaine. In 2006, he became Director of the
Corporate Bank for LCL, then became a member of the Executive Committee responsible
for the Corporate Bank and its cash management businesses. In 2011, he became Chief
Executive Officer of the Guadeloupe Regional Bank. Since 2016, Paul Carite has been
the Chief Executive Officer of the Crédit Agricole Mutuel Sud Méditerranée Regional
Bank.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chief Executive Officer: CRCAM Sud Méditerranée
|
| ― |
Director: CAAGIS (Chairman of the Audit Committee), FONCARIS
(Member of the Commitments
Committee), Crédit Agricole d'Egypt (member of Audit Committee and Risk Committee),
IFCAM, NEXECUR
|
| ― |
Member of the Supervisory Committee: SOFILARO
|
In companies outside Crédit Agricole Group whose shares are listed on a regulated
market
In other companies outside Crédit Agricole Group
| ― |
Director: S.A Indépendant du Midi
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
In companies outside Crédit Agricole Group
Jacques DUCERF
› BORN IN 1952
NATIONALITY | French
DATE OF FIRST APPOINTMENT | 2016
END OF TERM OF OFFICE | 2019 | Does not hold any shares in the Company
Office held in Crédit Agricole CIB in 2018: Non-voting Director
Business address: CRCAM Centre Est- 1 rue Pierre de Truchis de Lays - 69410 Champagne
au Mont d'Or - France
› BRIEF BIOGRAPHY
Graduate of the ESLSCA business school (1974), Jacques Ducerf has been Chairman
of
the Ducerf Group, a family-run group specialising in timber, since 1993. In 2000,
he became Director of the Crédit Agricole Local Bank in Charolles, then, in 2011,
Chairman of the Saône-et-Loire delegation. He has been the Chairman of Caisse régionale
de Crédit Agricole Centre Est since 2013. He also holds several responsibilities within
the Group's national bodies in particular, on Federal Committees and within Group
subsidiaries.
› OFFICES HELD AT 31 DECEMBER 2018
In companies of Crédit Agricole Group
| ― |
Chairman: CRACM Centre-Est, Délégation de Saône et Loire, FONCARIS
|
| ― |
Director: Caisse locale de Charolles, BFT Investment Managers,
CARIPARMA
|
In companies outside Crédit Agricole Group and whose shares are admitted for trading
on a regulated market
In other companies outside Crédit Agricole Group
| ― |
Chairman: Groupe Ducerf
|
| ― |
Conseil Banque de France à Mâcon
|
› OFFICES HELD DURING LAST FIVE YEARS
In companies of Crédit Agricole Group
| ― |
Chairman: Fédération des Caisses régionales de Bourgogne-Franche
Comté
|
In companies outside Crédit Agricole Group
| ― |
Chairman: Euroforest
|
| ― |
Deputy Chairman: Fédération nationale du bois
|
1.3.2 Shares held
by the Directors
The Directors appointed by the General Meeting of Shareholders must own at least
one
share in accordance with the provisions of the Articles of Association.
1.3.3 Ethics,
conflicts of interest, and privileged information
In accordance with the Rules of Procedure of the Board of Directors, in the performance
of their duties, directors and members of the Executive Management are bound by a
number of rules, including the Rules of Procedure of the Board (see article 3 partially
reproduced below).
EXTRACT FROM THE
RULES OF PROCEDURES OF THE BOARD OF DIRECTORS, ARTICLE 3
"Directors ensure that the principles and best corporate governance practices set
out in this article are respected, in particular to promote the quality of the work
of the Board of Directors.
[..]
Directors endeavour to preserve, in all circumstances, their independence and freedom
of judgement, decision and action. They must remain impartial and not let themselves
be influenced by any element outside the corporate interest that is their duty to
defend;
They undertake to inform the Board of any change in their personal or professional
situation that could call into question the conditions of their appointment relating
in particular to their reputation, availability or independence of mind.
They make all recommendations they believe could improve the operating procedures
of the Board. They collectively endeavour to ensure that the tasks of the Board of
Directors are carried out efficiently and smoothly.
They act in good faith and do not take any initiative that could harm the interests
of the Company or other group entities. They alert the Board to any information in
their possession that would not be in the interests of the Company. They are bound
by a duty to express their questions and opinions In the event of disagreement, they
ensure that these are explicitly recorded in the minutes of the deliberations.
In addition, they inform the Board of any potential conflict of interest situation,
including potential ones, in which they could be exposed directly or indirectly. They
abstain from participating in decision-making on such matters.
In general, directors are bound by the obligations applicable to them in accordance
with the French Monetary and Financial Code and the General Regulations of the French
financial markets authority (Autorité des Marchés Financiers, AMF), notably regarding
the use and disclosure of confidential and/ or privileged information and conflicts
of interest.
Directors respect the total confidentiality of the information they receive or
which
is exchanged during the discussions in which they participate within the framework
of the Board of Directors or its Committees, as well as the confidentiality of the
decisions taken.
For the record, members of the Board of Directors must abstain from using privileged
information, on their own behalf or on behalf of others, either directly or indirectly,
to acquire or sell, or attempt to acquire or sell financial instruments to which this
information relates as long as the information has not been made public. In particular,
if in the exercise of their office as director they obtain privileged information
on the Company, they are prohibited from using such information to carry out, or have
a third party carry out, any transactions in the Company's financial instruments.
Since directors hold information on the financial results of the Company and, consequently,
indirectly on Crédit Agricole S.A., in accordance with the rules of the Crédit Agricole
Group SA, they must limit any transactions in Crédit Agricole S.A. securities to each
six-week period following the publication of the annual, half-yearly and quarterly
results, as long as they are not privy to any inside information during these periods.
In addition, the Company could prohibit trading in any Crédit Agricole S.A. financial
instruments, including during authorised periods, as well as in any financial instruments
that would be the subject of privileged information within the framework of the meetings
of the Board of Directors or one of its Committees (strategic operations, acquisition
operations, creation of joint ventures, etc.).
Directors are required to declare to the Conflicts Management Group within the
Compliance
Department of the Company, on behalf of themselves and all persons closely related
to them, all transactions carried out on any financial instruments, except those issued
by or linked to the Company or to Crédit Agricole S.A., that they believe may create
a potential conflict of interest or contain confidential information that may be qualified
as privileged and acquired in the course of their duties as a director of the Company.
Moreover, when directors are no longer in a position to perform their duties in
accordance
with the provisions of this article due to their own action or for any other reason
including the rules of the Company in which they carry out their duties, they must
inform the Chairman of the Board of Directors, seek solutions to remedy the situation
and, failing that, take the personal consequences from carrying out their duties."
To Crédit Agricole CIB's knowledge, there is no potential conflict of interest
between
the duties of members of the Board of Directors and Management Board with respect
to Crédit Agricole CIB and their private interests.
Crédit Agricole CIB's Board of Directors and Management Board include Corporate
Officers
of companies (including Crédit Agricole Group companies- regional Banks of Crédit
Agricole or Crédit Agricole S.A.) with which Crédit Agricole CIB has commercial relationships.
This may be a source of potential conflicts of interest. This composition, as mentioned
previously, results from the desire to reflect the capital structure of Crédit Agricole
CIB, over 99% of which is controlled by the Crédit Agricole Group. For your information
Crédit Agricole CIB is affiliated with the Crédit Agricole network and that Crédit
Agricole S.A. acts as a central entity in accordance with the provisions of article
L511-31 of the Monetary and Financial Code.
There is no service contract that binds the members of the administrative or management
bodies to Crédit Agricole CIB or to any of its subsidiaries and that provides for
the granting of benefits under this agreement.
To the best of the Company's knowledge, to date, no convictions for fraud, bankruptcy,
receivership or liquidation have been filed in the last five years against any member
of the administrative bodies or the management of Crédit Agricole CIB.
Has knowledge of the society, no member of Crédit Agricole CIB's administrative
or
management bodies has been prevented by a court from acting in that capacity or from
intervening in a management or executive capacity in the activities of a listed company
during the last five years.
1.3.4 Transactions
carried out on the securities of the Company
The Company shares were not listed on a regulated market, provisions of Article
L.
621-18-2 of the French Monetary and Financial Code are not applicable to the Company
accordingly.
For 2018, the Company has no knowledge of the existence of transactions conducted
on their own account by the persons referred to in Article L. 621-18-2 of the French
Monetary and Financial Code and relating to debt securities of the Company or related
derivatives or other financial instruments.
Information on the ownership structure at 31 December 2018 is provided in Note
6.17
to the consolidated financial statements on pages 383 and 384.
1.3.5 Conventions
referred to in Article L. 225-37-4-2° of the French Commercial Code
In accordance with the provisions of Article L. 225-37-4-2° of the French Commercial
Code, to the best of the Company's knowledge, no agreement has been reached, directly
or by any intermediary during 2018 financial year, between:
| ― |
the Chief Executive Officer, one of the Deputy Chief Executive
Officers, one of the
Directors or one of the shareholders holding a fraction of the voting rights greater
than 10% of Crédit Agricole CIB and;
|
| ― |
another company in which Crédit Agricole CIB owns, directly or
indirectly, more than
half of the share capital,
|
except in cases where agreements relating to current transactions exist and have
been
concluded under normal conditions.
1.4 COMPENSATION
POLICY
1.4.1 General
principle underlying the compensation policy
Crédit Agricole CIB has established a responsible compensation policy that aims
to
reflect its values while respecting the interests of all the stakeholders, be they
employees, clients or shareholders. In light of the specific characteristics of its
business lines, its legal entities, and national and international legislation, Crédit
Agricole CIB strives to develop a compensation system that provides its employees
with a competitive reward relative to its market benchmark in order to attract and
retain the talent it needs. Benchmarking exercises against other financial groups
are regularly carried out for this purpose.
Compensation awards, particularly variable ones, aim to reward individual and group
performance over time while promoting sound and effective risk management.
The compensation policy's objective is to compensate employees fairly and appropriately
based on their contribution to Crédit Agricole CIB's success and the levels of service
and performance provided to clients. Consequently, the compensation policy has been
built to avoid conflicts of interest and moreover to ensure that employees do not
put their own interests or those of Crédit Agricole CIB before those of their clients.
The Crédit Agricole CIB compensation policy contributes to compliance with the
risk
appetite statement and framework approved by its governing bodies.
The Crédit Agricole CIB compensation policy is also part of a highly regulated
environment
that is specific to the banking sector. In general, Crédit Agricole CIB ensures the
compliance of its compensation policy with the national, European and international
legal and regulatory environment in effect. In particular, it complies with the provisions
of the following regulations:
| ― |
Directive 2013/36/EU of the European Parliament and of the Council
of 26 June 2013,
transposed in the French Monetary and Financial Code by Order No 2014-158 of 20 February
2014 ("CRD IV Directive");
|
| ― |
French Law No 2013-672 of 26 July 2013 on the separation and
regulation of banking
activities ("French Banking Law");
|
| ― |
the Rule introduced by Section 13 of the Bank Holding Company
Act, pursuant to Section
619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Volcker Rule");
|
| ― |
Directive 2014/65/EU of the European Parliament and Council and
regulation 600-2014
of the European Parliament and Council of 15 May 2014, transposed into the French
Monetary and Financial Code by Ordinance no. 2016-827 of 23 June 2016 and the delegated
regulation 2017/565 of 25 April 2016 of the European Commission ("MIFIDII").
|
The compensation policy was approved by the meeting of the Crédit Agricole CIB
Board
of Directors on 31 October 2018.
1.4.2 Total compensation
The total compensation paid to employees of the Crédit Agricole CIB Group comprises
the following elements:
| ― |
fixed compensation;
|
| ― |
annual individual variable compensation;
|
| ― |
collective variable compensation;
|
| ― |
long-term variable compensation;
|
| ― |
supplementary pension and health insurance plans;
|
| ― |
benefits in kind and other fringe benefits.
|
All or part of this package may be offered to each employee, according to their
level
of responsibility, skills, performance and location.
A - FIXED COMPENSATION
Fixed compensation rewards employees for the responsibilities entrusted to them,
as
well as the competencies used to exercise them, in a manner that is consistent with
the specificities of each business line in their local market.
These responsibilities are defined by a remit and contributions, an echelon within
the organisation and a profile of expected skills and experience.
Fixed compensation is determined in proportions such that it is possible to not
award
variable compensation in the event of insufficient performance.
Employees' fixed compensation is increased according to changes in their responsibilities
and their proficiency in their role, which is assessed through the annual performance
appraisal on the basis of the fulfilment of objectives and contributions to the role.
When an employee is given a new role, the change in responsibilities is taken into
account when determining the fixed compensation. Fixed compensation is made up of
the base salary, as well as of any other stable, recurring compensation component
that is not performance-based in any way.
B - ANNUAL INDIVIDUAL
VARIABLE COMPENSATION
Variable compensation is directly linked to individual and collective annual performance.
Individual performance is assessed based on the achievement of qualitative and quantitative
targets set at the start of the financial year and includes an assessment of the way
in which the employee acts in the client's interest. In general terms, respect for
internal and external procedures and rules is a key criteria for assessing performance.
Collective performance is based on the determination of a firm wide envelope which
is then broken down by business activity. This envelope is defined in a way which
does not limit the capacity of Crédit Agricole CIB to strengthen its equity capital
as required. It takes all risks into account, including liquidity risk, as well as
the cost of capital, in compliance with regulatory principles.
Variable compensation is made up of the bonus, as well as of any other individual
compensation component linked to performance, including guaranteed variable compensation.
♦ 1 - Composition
of compensation pools
Crédit Agricole CIB's total envelope for variable compensation is determined according
to its capacity to fund its bonuses (the Contribution) and by setting a pay-out ratio.
The Contribution is determined using the following formula, on the basis of the
standard
accounting definitions:
Net Banking Income (NBI) - direct and indirect expenses excluding bonuses - cost
of
risk - cost of capital before taxes;
NBI are calculated net of liquidity costs.
The cost of risk is understood to be the provisions for default Cost of capital,
used
to take into account the return on equity specific to an activity, is calculated by
applying the following formula:
| ― |
average risk weighted assets (RWA) x Capital supply rate (target
Tier 1 ratio) x ß
(coefficient measuring the market risk of an activity and enabling an adjustment to
the Tier 1 ratio according to the capital requirements of the business line).
|
Once the financing capacity has been determined, Crédit Agricole CIB defines a
pay-out
ratio, which depends on:
| ― |
the approved budgets at the start of the financial year;
|
| ― |
the practices of competing companies in comparable business lines.
|
♦ 2 - Individual
compensation allocations
Bonuses are funded with envelopes allocated for each business line. The individual
allocation to employees is decided in a discretionary manner by the line management
on the basis of an overall assessment of their individual and collective performance,
taking into account quantitative and qualitative considerations.
In order to prevent any risk of conflict of interests and disregard for the client's
interests, there is no direct and automatic link between the level of an employee's
commercial and financial results and the level of his/her variable compensation.
The decision-making process for individual bonus awards takes into account employees'
behaviour that is non-compliant with rules and procedures as well as risk limits,
within the framework of the rules and methods defined by Crédit Agricole CIB. Decisions
affecting individual variable compensation for employees with noted high-risk behaviour
are subject to annual review by Executive Management. In certain cases, other variable
compensation components are awarded in addition to the bonus, as is the case for senior
executives.
♦ 3 - Guaranteed
variable compensation
Awarding guaranteed variable compensation is only authorised for recruitments and
for a duration that cannot exceed one year. On recruitment, the variable compensation
allocated by the previous employer and definitively lost when the employment contract
ends may also be allocated.
Retention bonuses may exceptionally be granted for a pre-determined period of time
in certain specific cases (for example, in the event of the restructuring, winding-up
or transfer of a business line). Guaranteed variable compensation awards are subject
to the applicable payment rules for the performance year and may lead to deferred
payment.
♦ 4 - Limitation
on variable compensation
A variable compensation award in respect of a performance year is limited to the
amount
of the fixed compensation for all employees. This cap may be raised each year to twice
the amount of the fixed compensation by decision of the General Meeting of Crédit
Agricole CIB.
♦ 5 - Payment
conditions for the variable compensation
Above a certain threshold, the variable compensation is broken down into a non-deferred
portion and a portion deferred in thirds over a three-year period.
The deferred portion vests over a period of three years as follows: 1/3 in year
N+1,
1/3 in year N+2 year and 1/3 in year N+3 relative to the awarding year (N), subject
to meeting the vesting conditions:
| ― |
performance conditions;
|
| ― |
presence condition;
|
| ― |
compliance with the internal rules and risk limits.
|
The deferred variable compensation and part of the non-deferred variable compensation
are allocated in the form of Crédit Agricole S.A. shares or equity-linked instruments.
If it is discovered, within 5 years after the payment, that a beneficiary: (i)
is
partly or fully responsible for significant losses to the detriment of Crédit Agricole
CIB or its clients or (ii) is responsible for a serious breach of the internal or
external rules and procedures, Crédit Agricole CIB reserves the right, subject to
any local law in force, to demand the return of all or part of the sums already paid.
Any hedging or insurance strategy that seeks to limit the scope of the risk alignment
provisions contained in the compensation system is prohibited.
Identified staffs are subjected to a specific system.
♦ 6 - Variable
compensation of employees whose activities are subject to a mandate
(french banking law, volcker rule, etc.)
Variable compensation is awarded so as not to reward or encourage prohibited trading
activities, but may reward the generation of revenue or the supply of services to
clients and therefore must comply with internal policies and procedures, including
the Volcker rule compliance manual.
Among other things, individual performance bonuses are based on an assessment of
the
attainment of pre-defined, individual and collective targets, which are set for employees
in strict compliance with the terms of the mandate managed.
Quarterly checks are carried out by the Risk Management Department and by the Market
Activities Department to ensure that the terms of office are correctly applied.
During the end of year assessments, the management assesses the performance of
employees
in light of the targets set at the start of the year, including compliance with trading
mandates. This assessment takes into account conduct that is not compliant with internal
rules and procedures, and in particular noncompliance with mandates.
♦ 7 - Variable
compensation program for the control functions
In order to prevent potential conflicts of interests, the compensation of control
function personnel is set independently of the compensation of the personnel employed
by the business lines for which they validate or review the operations. The objectives
set for control function personnel and the budgets used to determine their variable
compensation must not take into account the criteria concerning the results and economic
performances of the business area that they monitor. Their variable compensation envelops
as well as their individual award will be defined according to market practices. The
Crédit Agricole CIB Compensation Committee, as part of its remits, ensures compliance
with the principles for determining the compensation of the risk and compliance managers.
C - COLLECTIVE
VARIABLE COMPENSATION
In addition, for many years, it has been Crédit Agricole CIB's policy to share
its
results and performance collectively with its employees. For this purpose, a collective
variable compensation system (discretionary and mandatory profit sharing) has been
set up in France. Similar systems that provide all members of staff with a share of
the results have been set up within certain entities abroad.
D - LONG-TERM
VARIABLE COMPENSATION
This component of variable compensation unifies, motivates and increases loyalty.
It complements the annual variable compensation mechanism by rewarding the long-term
collective performance of the Group.
It is composed of differentiated systems according to the level of responsibility
in the Company:
| ― |
"employee" shareholdings open to all employees;
|
| ― |
long-term compensation in share-linked cash and/or cash subject
to performance conditions
based on economic, financial and social criteria defined in line with the long-term
strategy of the Crédit Agricole S.A. Group. It is reserved for Senior Executives and
key Group executives.
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E - RETIREMENT,
DEATH AND DISABILITY, HEALTH
Depending on the country and market practices, Crédit Agricole CIB promotes a wide
range of employee benefits allowing:
| ― |
support in creating retirement income or savings;
|
| ― |
a minimum level of basic financial protection to employees and
their families.
|
F - BENEFITS IN
KIND AND OTHER FRINGE BENEFITS
In some cases, the total compensation also includes benefits in kind. These are
mainly:
| ― |
the allocation of a company car according to the position held;
|
| ― |
the granting of benefits to cover additional living costs for
mobile workers.
|
These elements may be supplemented according to country by various plans aimed
at
providing a stimulating work environment and a work-life balance.
1.4.3 Governance
of the compensation policy
Crédit Agricole CIB's compensation policy is reviewed annually by its Executive
Management,
on the basis of a proposal by the Human Resources Department and in accordance with
Crédit Agricole S.A. Group's compensation policy guidelines. The compensation policy
is approved by the Board of Directors, on the recommendation of the Compensation Committee.
In accordance with Group policy principles, the Human Resources Department links
Control
functions to risk analysis in the management of compensation, particularly as regards
definition of identified staff, compliance with regulatory standards and monitoring
of high-risk behaviour.
The Group's Internal Audit performs an annual and independent audit of the implementation
of the compensation policy.
1.4.4 Compensation
of identified staff
Consistent with the Group's general principles, the compensation policy applicable
to identified staff is part of a strict regulatory environment (CRD4) that imposes
requirements in the structure of their compensation.
The category of identified staff includes employees who, by virtue of the positions
held, are likely to have a significant impact on the risk exposure of Crédit Agricole
CIB.
The determination of employees as identified staff is made through a joint process
between Crédit Agricole CIB and Crédit Agricole S.A. and between Human Resources functions
and various Control functions. This process is reviewed annually.
Furthermore, Crédit Agricole CIB's entities outside France may be subject to more
stringent local regulations.
A - SCOPE
Within Crédit Agricole CIB, the following, in particular, are included within the
scope of the identified staff:
| ― |
corporate officers and executives;
|
| ― |
managers of the main business activities;
|
| ― |
managers of the control functions;
|
| ― |
employees who have a significant credit risk commitment capacity;
|
| ― |
employees with substantial powers to take market risks;
|
| ― |
employees who have significant total compensation;
|
| ― |
and, on the proposal of the Risk Management Department, the Compliance
Department
or the Human Resources Department, and by decision of Executive Management, any employee
likely to have significant impact on the risk exposure of Crédit Agricole CIB.
|
Moreover, employees may also be deemed to be risk-takers at subsidiary level under
local regulations.
B - ADJUSTMENTS
MADE TO THE COMPENSATION POLICY FOR IDENTIFIED STAFF
♦ 1 - Rules for
the compensation of identified staff
Pursuant to its regulatory obligations, the main features of Group compensation
policy
for identified staff are:
| ― |
as for all employees, the amounts and distribution of variable
compensation must not
impair the institutions' ability to strengthen their equity as required;
|
| ― |
as for all employees, the variable component may not exceed 100%
of the fixed component.
Nevertheless, each year, the General Meeting of Shareholders can vote to apply a higher
maximum ratio provided that the total variable component never exceeds 200% of each
employee's fixed component;
|
| ― |
as for all employees, a portion of the variable compensation
is deferred over three
years and is acquired in tranches subject to performance conditions. The proportion
to be deferred is, however, higher for identified staff;
|
| ― |
as for all employees, a portion of the variable compensation
is paid in Crédit Agricole
S.A. shares or instruments linked to the Crédit Agricole S.A. share. The proportion
paid in instruments is, however, higher for identified staff;
|
| ― |
the vesting of each deferred tranche is followed by a six-month
lock-up period. Part
of the non-deferred compensation is also subject to a six months holding period.
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♦ 2 - Deferred
vesting rules
Individual variable compensation comprises two separate parts:
| ― |
Short-term, non-deferred variable compensation;
|
| ― |
Long-term, deferred and conditional variable compensation that
represents 40% to 60%
of the total individual variable compensation.
|
The system set up promotes staff members' involvement in the medium-term performance
of Crédit Agricole CIB and risk control. In practice, due to the proportionality principle,
members of staff for whom the variable share of compensation is below a threshold
defined at Group level are excluded from the scope of the deferred vesting rules,
unless otherwise required by local regulators in the countries where Crédit Agricole
CIB does business.
The deferred portion varies depending on the total variable compensation awarded
for
the financial year. The higher the variable compensation, the higher the deferred
portion of the total variable compensation.
The vesting conditions are as follows: vesting in thirds over three years following
the allocation and subject to the same vesting conditions (presence, performance,
risks).
In the interests of consistency and alignment with the overall performance of the
Company, a deferred variable compensation system also applies to Crédit Agricole CIB
employees who do not fall in the category of identified staff.
♦ 3 - Payments
in securities or equivalent instruments
For identified staff, payment in shares or equivalent instruments represents:
| ― |
the total deferred portion of the variable compensation;
|
| ― |
up to 10% of the non-deferred variable compensation.
|
Accordingly, at least 50% of the variable compensation of identified staff is awarded
in shares or equivalent instruments.
Payments are made at the end of a holding period, in accordance with the regulations.
This holding period, which is defined at the Crédit Agricole S.A. Group level, is
six months.
Any hedging or insurance strategy that seeks to limit the scope of the risk alignment
provisions contained in the compensation system is prohibited.
1.4.5 Compensation
of senior executives-executive corporate officers
The compensation policy applicable to management and Executive and non-Executive
Corporate
Officers and Executive Corporate Officers of Crédit Agricole CIB falls within the
framework of the compensation policy for management at Crédit Agricole S.A..
A - GENERAL COMPENSATION
PRINCIPLES
The compensation policy for the members of Crédit Agricole CIB's Executive Management
is approved by the Board of Directors on the basis of a proposal by the Compensation
Committee. This policy is reviewed annually by the Board of Directors in order to
take into account changes in the competitive environment and context. It is consistent
with the compensation policy applicable to all Crédit Agricole S.A. Group's executive
managers. This principle makes it possible to bring together the Group's major stakeholders
around common, shared criteria.
In addition, the compensation of members of Crédit Agricole CIB's Executive Management
complies with:
| ― |
the regulatory framework defined by the Monetary and Financial
Code and the Decree
of 3 November 2014 on internal controls in credit institutions and investment firms,
which transposes in France the European provisions on compensation of staff identified
who are Executive Corporate Officers;
|
| ― |
the recommendations and principles of the Corporate Governance
Code for Listed Companies
updated in June 2018 ("AFEP-MEDEF Code");
|
| ― |
the provisions of Law No 2015-990 of 6 August 2015 on economic
growth, activity and
equal opportunities and of Article L. 225-42-1 of the French Commercial Code on the
vesting of conditional annual supplementary defined-benefit rights.
|
Pursuant to a proposal by the Compensation Committee, each year the Board of Directors
reviews the compensation components for members of the Executive Management, with
the principal objective of recognising long-term performance.
B - FIXED COMPENSATION
Pursuant to a proposal of the Crédit Agricole CIB Compensation Committee, the Board
of Directors establishes the fixed compensation of Crédit Agricole CIB's Executive
Management, taking into account:
| ― |
the scope of the activities under their responsibility;
|
| ― |
practices in the market and the compensation paid to persons
holding similar positions.
On an ongoing basis, with the assistance of specialised firms, studies are conducted
at the Group level on the positioning of the compensation of the Company's Executive
Corporate Officers compared to other companies in the financial sector in order to
ensure the consistency of the compensation principles and levels.
|
In accordance with the AFEP-MEDEF Code recommendations (paragraph 23.2.2), a review
will be carried out on the fixed compensation of Executive Corporate Officers only
after relatively long maturities, unless a change in the scope of the supervisory
duties justifies a re-examination of the fixed compensation.
When a new Executive Corporate Officer is appointed, his or her compensation will
be determined by the Board of Directors, either in accordance with the principles
and criteria approved by the General Meeting or in accordance with the existing practices
for officers exercising similar functions, adapted where applicable when the person
takes up new functions or a new office with no equivalent in respect of the preceding
period.
C - VARIABLE COMPENSATION
♦ 1 - Annual variable
compensation
Each year, the Board of Directors, on the recommendation of the Compensation Committee
and subject to the approval of the General Meeting, determines the amount of the variable
compensation due for the financial year ended 31 December for each of the Executive
Corporate Officers.
The variable compensation policy for the members of Executive Management is specifically
aimed at:
| ― |
linking compensation levels with actual long-term performance;
|
| ― |
linking the interests of management with those of the Group by
including financial
and non-financial performance.
|
For each member of Executive Management, the annual performance bonus is based
50%
on quantifiable criteria and 50% on qualitative criteria, thereby combining recognition
of overall performance with a balance between financial and manage real performance.
At the recommendation of the Compensation Committee, the Board of Directors approves
the quantifiable and qualitative criteria proposed.
The performance bonus may reach the target level in the event of achieving all
the
financial and nonfinancial objectives and may reach the maximum level in the event
of exceptional performance. The target and maximum levels are expressed as a percentage
of the fixed salary and are defined by the Board of Directors for each member of Crédit
Agricole CIB's Executive Management.
A Long-Term Incentive can be added to this bonus for Executive Managers of the
Crédit
Agricole S.A. Group, in order to encourage sustainable performance beyond the financial
results and strengthen its relationship with compensation, with a special focus on
the impact on society. It is awarded following managerial assessment and is an integral
part of the variable compensation subject to the approval of the Board of Directors.
In accordance with the AFEP-MEDEF Code (paragraph 23.2.3), the variable compensation
is capped and may not exceed the maximum levels set out in the compensation policy.
♦ 2 - Vesting
conditions for the annual variable compensation
The deferred part of the annual variable compensation, which can represent 40%
to
60% of the amount awarded, is paid in the form of instruments indexed on the performance
of the Crédit Agricole S.A. share, the vesting of which depends on three targets being
met: one linked to performance, a second depends on service within the Group and a
third on the absence of risky behaviour. The performance condition in the Crédit Agricole
CIB deferred plan is linked to the attainment of a Net Income target by Crédit Agricole
CIB.
The performance condition in the long-term incentive plan for directors of the
Crédit
Agricole S.A. group itself depends on three targets:
1. the intrinsic financial performance of Crédit Agricole S.A., defined as Crédit
Agricole S.A. operating income growth;
2. the relative performance of the Crédit Agricole S.A. share compared with a composite
index of European banks;
3. the societal performance of Crédit Agricole S.A. measured by the FReD index.
For each criterion, vesting may vary from 0% to 120%. Each criterion accounts for
one-third of the achievement of the performance condition. For each year, the achievement
of the performance condition is the average percentage vested for each criterion,
which is capped at 100%.
The non-deferred portion of the total annual variable compensation, which can represent
40% to 60%, is paid in part at the award date (subject to the approval of the General
Meeting) and in part after a six-month holding period, this latter part being indexed
to changes in the Crédit Agricole S.A. share price.
D - STOCK OPTIONS
- FREE SHARES GRANTED
No Crédit Agricole S.A. stock options have been allocated to Executive Corporate
Officers
since 2006.
No bonus shares were awarded to Executive Corporate Officers in 2018.
E - OTHER COMMITTMENTS
♦ 1 - Retirement
Within Crédit Agricole CIB, there is an additional closed pension regime, the incremental
rights of which are only acquired when the beneficiary finishes their career at Crédit
Agricole CIB and are expressed as a percentage of a base called the reference salary
which is equal to the average of the last three years of fixed compensation plus the
average of the gross bonuses awarded over the last thirty six months (the average
of the bonuses being limited to half of the last fixed salary). This defined-benefit
pension scheme, enforced by unilateral company decision pursuant to Article L. 911-1
of the French Social Security Code, is subject to management outsourced to a body
governed by the French Insurance Code. Funding for the outsourced assets is carried
out as necessary by premiums fully funded by the employer and subject to the 24% contribution
laid down by Article L. 137-11 of the French Social Security Code.
The benefit of this supplementary pension scheme, which was subject to the regulated
agreements procedure and the details of which appear in the Statutory Auditors' special
report for the 2016 and 2018 financial year, was taken into account by Crédit Agricole
CIB Boards of Directors in the determination of the total compensation of the Executive
Corporate Officers. It potentially benefits Messrs François Marion, Deputy Chief Executive
Officer, and Régis Monfront, Deputy Chief Executive Officer until 11 July 2018.
With regard to the other Crédit Agricole CIB Executive Corporate Officers with
an
employment contract with Crédit Agricole S.A., namely: Mr Jean-Yves Hocher, Chief
Executive Officer until 31 October 2018; Mr Jacques Ripoll, Chief Executive Officer
since 1 November 2018 and Monsieur Jacques Prost, Deputy Chief Executive Officer until
17 June 2018; they potentially benefit from the common supplementary pension regime
for directors of the Crédit Agricole group which Crédit Agricole CIB did not join.
Crédit Agricole S.A. joined this regime in January 2010 with the introduction of
its
pension regulations adopted by a collective bargaining agreement in accordance with
article L. 911-1 of the French Social Security Code.
The scheme currently implemented within Crédit Agricole S.A. is a combination of
a
defined-contribution plan and a defined-benefit plan wherein the rights are the defined-contribution
plan:
| ― |
contributions to the defined-contribution plan equal 8% of the
gross monthly salary
capped at eight times the social security cap (of which 3% paid by the Executive Corporate
Officer);
|
| ― |
on the condition that the beneficiary is a Corporate Officer
or an employee when exercising
his pension entitlements, additional entitlements under the defined-benefit plan for
each year of service represent 1.20% of the reference compensation, capped at 36%
of the reference compensation.
|
In any case, on liquidation, the total pension income is capped, for all company
pension
regimes and basic and complementary obligatory regimes, at 70% of the reference compensation
by application of the additional pension regulation for senior executives of Crédit
Agricole S.A.
The rights established within the group prior to the effective date of the existing
regulation are maintained and are cumulative where appropriate with the rights arising
from the application of the existing regulation, especially for the calculation of
the paid rent cap.
The reference salary is defined as the average of the three highest gross annual
compensations
received during the last 10 years of activity within Crédit Agricole entities, including
both fixed compensation and variable compensation, the latter being taken into account
up to a ceiling of 60% of fixed compensation.
This defined contribution supplementary pension scheme meets the recommendations
of
the AFEP-MEDEF Code and the provisions of law no. 2015-990 of 6 August 2015 for growth,
activity and equality of economic opportunities and of article L. 225-42-1 of the
French Commercial Code, regarding the vesting of annual conditional rights in defined
contributions supplementary pension schemes:
| ― |
the group of potential beneficiaries is substantially broader
than Executive Corporate
Officers alone;
|
| ― |
minimum length of service: five years (the Code requires only
two years of service);
|
| ― |
progressivity rate: proportional to the length of service capped
at 120 quarters (30
years) with a vesting rate of between 0.125% and 0.30% per quarter validated, i.e.
between 0.5% and 1.2% per annum (vs 3% maximum required);
|
| ― |
estimated supplementary pension below the aforementioned ceiling
of 45% of fixed and
variable compensation due in respect of the reference period;
|
| ― |
obligation for the beneficiary to be a Corporate Officer or a
Senior Executive employee
when exercising their pension entitlements.
|
This pension defined-benefit plan is subject to a management outsourced to a body
governed by the Insurance Code. Funding for the outsourced assets is carried out by
annual premiums fully funded by the employer and submitted to the 24% contribution
laid down by Article L. 137-11 of the French Social Security Code.
♦ 2 - Severance
payment
No severance payment due or likely to be due in the event of termination or change
of function is expected for the corporate officers of Crédit Agricole CIB. Otherwise,
that will be the subject of the regulated conventions procedure.
♦ 3 - Non-competition
clause
There are no plans for non-compete clauses for Executive Corporate Officers.
Otherwise, these would be subject to a regulated agreements procedure.
Details relating to a non-compete clause put in place by Crédit Agricole S.A. as
part
of the employment contract and which will not be financially supported by Crédit Agricole
CIB are given in the section concerning Jacques Ripoll.
F - OTHER BENEFITS
OF THE EXECUTIVE CORPORATE OFFICERS
Executive Corporate Officers benefit from health cover, life and disability cover
and a car benefit.
No other benefits are awarded to Executive Corporate Officers.
INDIVDUALS COMPENSATIONS
OF EXECUTIVE CORPORATE OFFICERS
♦ Mr. Jean-Yves
Hocher - Chief executive officer from 1 January 2018 to 31 October
2018
► Table 1 - Compensation,
shares and stock awarded to Executive Corporate Officers
of Crédit Agricole CIB
| In euros (gross amounts) |
2017 |
2018 |
| Compensation awarded in respect of the financial year
(1) |
1,109,347 |
922,989 |
| Value of options awarded during the year (2) |
|
|
| Value of free shares awarded during the year (2) |
|
|
(1)
The compensation shown in this table was awarded for the year indicated for the period
corresponding to the term of office. The detailed tables below distinguish between
compensation awarded for a particular year and compensation received during the year,
in his capacity as corporate officer.
(2)
No Crédit Agricole S.A. stock options were awarded to corporate officers in 2017 and
2018. No employee performance share plan has been set up within Crédit Agricole S.A.
or Crédit Agricole CIB.
► Table 2 - Summary
table of gross compensation amounts
| In euros |
2017 |
2018 |
| Jean-Yves Hocher Chief executive
officer from 1 January 2018 to 31 October 2018 |
Amount awarded for 2017 at the
expense of Crédit Agricole S.A. |
Amount paid for 2017 at the expense
of Crédit Agricole S.A. |
Amount awarded for 2018 at the
expense of Crédit Agricole S.A. |
Amount paid for 2018 at the expense
of Crédit Agricole S.A. |
| Fixed compensation |
550,000 |
550,000 |
458,333 |
458,333 |
| Non-deferred variable compensation paid in cash |
218,480 |
197,120 |
181,480 |
218,480 |
| Non-deferred variable compensation indexed to the Crédit
Agricole S.A. share price |
54,620 |
62,093 |
45,370 |
46,427 |
| Deferred and conditional variable compensation index-linked
to the share price of
Crédit Agricole S.A.
|
273,100 |
357,477 |
226,850 |
272,543 |
| Extraordinary compensation |
|
|
|
|
| Director's fees |
|
|
|
|
| Benefits in kind |
13,147 |
13,147 |
10,956 |
10,956 |
| Total |
1,109,347 |
1,179,837 |
922,989 |
1,006,739 |
► Table 2 bis
- Breakdown of deferred variable compensation vested and paid
|
|
Share price at award date |
Vesting in 2017 |
| In euros |
|
Amount awarded |
Amount vested |
Amount paid(1) |
| Plan awarded in 2014 for 2013 |
€11.37 |
89,994 |
89,994 |
118,793 |
| Plan awarded in 2015 for 2014 |
€12.86 |
91,396 |
91,396 |
106,934 |
| Plan awarded in 2016 for 2015 |
€9.67 |
85,000 |
85,000 |
131,750 |
| Plan awarded in 2017 for 2016 |
€11.94 |
|
|
|
| Total |
|
266,390 |
266,390 |
357,477 |
|
|
Vesting in 2018 |
| In euros |
Amount awarded |
Amount vested |
Amount paid(2) |
| Plan awarded in 2014 for 2013 |
|
|
|
| Plan awarded in 2015 for 2014 |
91,409 |
91,409 |
85,010 |
| Plan awarded in 2016 for 2015 |
85,000 |
85,000 |
105,400 |
| Plan awarded in 2017 for 2016 |
82,133 |
82,133 |
82,133 |
| Total |
258,542 |
258,542 |
275,543 |
(1)
The share price at the payment date is €15.01 for the deferred variable compensation
vested in 2017.
(2)
The share price at the payment date is €11.97 for the deferred variable compensation
vested in 2018.
Mr Jean-Yves Hocher was Chief Executive Officer of Crédit Agricole CIB from 1 December
2010 to 31 October 2018.
With effect from 1 September 2015, Mr Jean-Yves Hocher's corporate office as Deputy
Chief Executive Officer of Crédit Agricole S.A. came to an end, leading to the reinstatement
of his employment contract, which had been suspended throughout his term of office.
Concomitantly with this reinstatement, it was decided, with the agreement of the latter,
that his compensation would be fully borne by Crédit Agricole S.A. from this date
onwards. This change was approved by the Crédit Agricole CIB Board of Directors on
29 October 2015. Thus, since 1 September 2015, Mr Jean-Yves Hocher has acted as Chief
Executive Officer of Crédit Agricole CIB free of charge.
His compensation has therefore been determined by Crédit Agricole S.A. with respect
to his employment contract with Crédit Agricole S.A. and reported for information
purposes to the Board of Directors of Crédit Agricole CIB.
Crédit Agricole CIB continues to cover only the portion of the variable compensation
awarded for periods prior to 1 September 2015.
FIXED COMPENSATION
For the 2018 financial year, Mr Jean-Yves Hocher benefited from fixed compensation
of €458,333 (€550,000 on an annual basis), as part of his Crédit Agricole S.A. employment
contract.
VARIABLE COMPENSATION
Variable compensation
awarded in 2019 for 2018
Given the achievement of financial and non-financial objectives, the amount of
the
variable compensation for the 2018 financial year awarded to Mr Jean-Yves Hocher was
accordingly approved by Crédit Agricole S.A. at €453,700.
This compensation breaks down as follows:
| ― |
€181,480 paid from month of March 2019;
|
| ― |
€45,370 indexed on the Crédit Agricole S.A. share price and paid
in September 2019;
|
| ― |
€226,850 awarded in instruments linked to the Crédit Agricole
S.A. share price, whose
final vesting is subject to the conditions set out in the regulations governing the
Crédit Agricole S.A. plan (presence, performance, risks).
|
Deferred and conditional
variable compensation vested in 2018 (for prior financial
years)
In respect of the deferred variable compensation for prior years, €258,542 was
vested
in 2018 by Mr Jean-Yves Hocher for an amount equal, at the payment date, to €272,543
after indexing the Crédit Agricole S.A. share price (share price as at the payment
date: €11.97).
This amount includes:
| ― |
at the first tranche of the deferred variable compensation awarded
in 2017 for 2016,
vested in its entirety, i.e. €82,133 (share price as at the award date: €11.94);
|
| ― |
at the second tranche of the deferred variable compensation awarded
in 2016 for 2015,
vested in its entirety, i.e. €85,000 (share price as at the award date: €9.67);
|
| ― |
at the third tranche of the deferred variable compensation awarded
in 2015 for 2014,
vested in its entirety, i.e. €91,409 (share price as at the award date: €12.86).
|
EXTRAORDINARY
COMPENSATION
No extraordinary compensation was awarded or paid for the 2018 financial year.
DIRECTORS' FEES
Mr Jean-Yves Hocher waived receipt of Directors' fees in respect of his positions
in the Crédit Agricole S.A. Group companies.
SEVERANCE PAYMENT
No severance benefit was paid to Jean-Yves Hocher during the financial year.
Commitments made by Crédit Agricole S.A., but for which Crédit Agricole CIB has
incurred
no financial obligation, were made in connection with Mr Jean-Yves Hocher's employment
contract with that company.
If his employment contract is subsequently terminated, Mr JeanYves Hocher will
receive
a severance payment, calculated on a base corresponding to twice the annual gross
compensation (excluding benefits in kind) received during the 12 months preceding
the termination of his contract, including any other indemnity and, in particular,
traditional redundancy pay and any possible non-competition payments.
NON-COMPETITION
CLAUSE
No non-competition clause provided for Mr Jean-Yves Hocher in connection with its
mandate.
SUPPLEMENTARY
PENSION SCHEME
No supplementary pension amount is payable to Mr Jean-Yves Hocher in respect of
the
exercise of his office during the 2018 financial year.
Mr Jean-Yves Hocher is a beneficiary of the supplementary pension scheme for Crédit
Agricole Executive Managers, which supplements the collective and mandatory retirement
pension and death and disability schemes in connection with his work contract with
Crédit Agricole S.A..
The estimated total of the supplementary pension entitlements, taken together with
estimated pensions from the compulsory retirement schemes:
| ― |
trigger the application of the cap of 70% of the reference compensation
on the closing
date, for all schemes, in accordance with the supplementary pension regulations;
|
| ― |
is less than the contractual cap of sixteen times the annual
Social Security cap.
|
The uncertain entitlements under the defined-benefit supplementary pension scheme
are subject to continued employment conditions at retirement and are estimated on
the basis of 29 years and 6 months of service recorded on 31 October 2018. At 31 October
2018, there was no increase in the estimated conditional entitlements (expressed as
a percentage of the benchmark compensation).
Mr Jean-Yves Hocher's annual and conditional individual supplementary pension entitlements
as at 31 October 2018 break down as:
| ― |
a life annuity under a defined-contribution supplementary pension,
estimated at €9,000
gross;
|
| ― |
a life annuity under a defined-benefit supplementary pension,
estimated at €496,000
gross.
|
BENEFITS IN KIND
During his term of office, Mr Jean-Yves Hocher was provided with accommodation
and
a chauffeur-driven car. These benefits were treated as in-kind benefits for tax purposes
in accordance with current regulations.
INDIVDUALS COMPENSATIONS
OF EXECUTIVE CORPORATE OFFICERS
♦ Mr. Jacques
Ripoll - Chief executive officer from 1 November 2018
► Table 1 - Compensation,
shares and stock awarded to Executive Corporate Officers
of Crédit Agricole CIB
| In euros (gross amounts) |
2017 |
2018 |
| Compensation awarded in respect of the financial year
(1) |
|
307,667 |
| Value of options awarded during the year (2) |
|
|
| Value of free shares awarded during the year (2) |
|
|
(1)
The compensation shown in this table was awarded for the year indicated for the period
corresponding to the term of office. The detailed tables below distinguish between
compensation awarded for a particular year and compensation received during the year,
in his capacity as corporate officer.
(2)
No Crédit Agricole S.A. stock options were awarded to corporate officers in 2017 and
2018. No employee performance share plan has been set up within Crédit Agricole S.A.
or Crédit Agricole CIB.
► Table 2 - Summary
table of gross compensation amounts
| In euros |
2017 |
2018 |
| M. Jacques Ripoll Chief executive
officer from 1 November 2018 |
Amount awarded for 2017 at the
expense of Crédit Agricole S.A. |
Amount paid for 2017 at the expense
of Crédit Agricole S.A. |
Amount awarded for 2018 at the
expense of Crédit Agricole S.A. |
Amount paid for 2018 at the expense
of Crédit Agricole S.A. |
| Fixed compensation |
|
|
166,667 |
166,667 |
| Non-deferred variable compensation paid in cash |
|
|
42,300 |
|
| Non-deferred variable compensation indexed to the Crédit
Agricole S.A. share price |
|
|
14,100 |
|
| Deferred and conditional variable compensation index-linked
to the share price of
Crédit Agricole S.A.
|
|
|
84,600 |
|
| Extraordinary compensation |
|
|
|
|
| Director's fees |
|
|
|
|
| Benefits in kind |
|
|
|
|
| Total |
|
|
307,667 |
166,677 |
Mr Jacques Ripoll has been Crédit Agricole CIB Chief Executive Officer since 1
November
2018.
The Board of Directors of Crédit Agricole CIB on 31 October 2018 decided that the
position of Crédit Agricole CIB Chief Executive Officer should be unpaid. His compensation
is therefore determined by Crédit Agricole S.A. for his employment contract with that
company and is reported for information purposes to the Board of Directors of Crédit
Agricole CIB.
FIXED COMPENSATION
For the 2018 financial year, Mr Jacques Ripoll benefited from fixed compensation
of
€166,667 (€1,000,000 on an annual basis), as part of his Crédit Agricole S.A. employment
contract.
VARIABLE COMPENSATION
Variable compensation
awarded in 2019 for 2018
Given the achievement of financial and non-financial objectives, the variable compensation
amount for the 2018 financial year awarded to Mr Jacques Ripoll was accordingly approved
by Crédit Agricole S.A. at €141,000.
This compensation breaks down as follows:
| ― |
€42,300 paid from the month of March 2019;
|
| ― |
€14,100 indexed on the Crédit Agricole S.A. share price and paid
in September 2019;
|
| ― |
€84,600 awarded in instruments linked to the Crédit Agricole
S.A. share price, whose
final vesting is subject to the conditions set out in the regulations governing the
Crédit Agricole S.A. plan (presence, performance, risks).
|
EXTRAORDINARY
COMPENSATION
No extraordinary compensation was awarded or paid for the 2018 financial year.
DIRECTORS' FEES
Mr Jacques Ripoll waived receipt of Directors' fees in respect of his positions
in
the Crédit Agricole S.A. Group companies.
SEVERANCE PAYMENT
In connection with his corporate office with Crédit Agricole CIB, Mr Jacques Ripoll
is not entitled to any severance pay that will or may be owed in the event his position
is terminated or changed.
NON-COMPETITION
CLAUSE
In the event of the effective termination of his employment contract with Crédit
Agricole
S.A., Mr Ripoll may be bound by a non-compete clause for a maximum of one year from
the contract termination date. This commitment was duly authorised by the Board Meeting
of 31 October 2018 under the terms of article L225-42-1 of the Commercial Code.
SUPPLEMENTARY
PENSION SCHEME
No supplemental pension amount is payable to Mr Jacques Ripoll in respect of the
2018
financial year.
Mr Jacques Ripoll is a beneficiary of the supplementary pension scheme for Crédit
Agricole Executive Managers, which supplements the collective and mandatory retirement
pension and death and disability schemes in connection with his work contract with
Crédit Agricole S.A..
The estimated total of the supplementary pension entitlements, taken together with
estimated pensions from the compulsory retirement schemes:
| ― |
trigger the application of the cap of 70% of the reference compensation
on the closing
date, for all schemes, in accordance with the supplementary pension regulations;
|
| ― |
is below the contractual cap of ten times the Social Security
annual cap.
|
As this comes under the defined-benefit plan, the annual vesting of entitlements
is
conditional on Crédit Agricole CIB's performance conditions, in accordance with Article
L. 225-42-1 of the French Commercial Code as amended by Law No 2015-990 of 6 August
2015. The annual vesting of Mr Ripoll's entitlements is therefore subject, in accordance
with the Board of Directors' decision of 31 October 2018, to a performance condition
corresponding to Crédit Agricole CIB achieving at least 50% of the Net Income, Group
Share target for Corporate and Investment Banking (CIB) activities as adjusted:
| ― |
the positive or negative effects of the Mark to Market valuation
of loan hedges for
CPM and Debt Valuation Adjustment (DVA);
|
| ― |
the effects of the initial application of the new CVA, DVA and
FVA rules;
|
| ― |
impairment of goodwill.
|
This condition is deemed met if Crédit Agricole CIB does not achieve this target
due
to an adverse market environment similarly affecting Crédit Agricole CIB's competitors.
The Board of Directors on 21 March 2019 validated the achievement of the performance
condition for the 2018 financial year. The uncertain entitlements under the defined-benefit
supplementary pension scheme are subject to continued employment conditions at retirement
and are estimated on the basis of 0 years and 4 months of service recorded on the
closing date.
Mr Jacques Ripoll's annual and conditional individual supplementary pension entitlements
as at 31 December 2018 break down as:
| ― |
a life annuity under a defined-contribution supplementary pension,
estimated at €0
gross;
|
| ― |
a life annuity under a defined-benefit supplementary pension,
estimated at €6,000
gross.
|
BENEFITS IN KIND
The Company provides Mr Jacques Ripoll with a chauffeur-driven car. This benefit
is
treated as an in-kind benefit for tax purposes in accordance with current regulations.
♦ Mr. François
Marion - Deputy chief executive officer
► Table 1 - Compensation,
shares and stock awarded to Executive Corporate Officers
of Crédit Agricole CIB
| In euros (gross amounts) |
2017 |
2018 |
| Compensation awarded in respect of the financial year
(1) |
766,028 |
776,028 |
| Value of options awarded during the year (2) |
|
|
| Value of free shares awarded during the year (2) |
|
|
(1)
The compensation shown in this table was awarded for the year indicated for the period
corresponding to the term of office. The detailed tables below distinguish the compensation
awarded for a particular year and the compensation received during the year, in his
capacity as corporate officer.
(2)
No Crédit Agricole S.A. stock options were awarded to corporate officers in 2017 and
2018. No employee bonus share plan has been set up within Crédit Agricole CIB.
► Table 2 - Summary
table of gross compensation amounts
| In euros |
2017 |
2018 |
| François Marion Deputy Chief Executive
Officer |
Amount awarded |
Amount paid |
Amount awarded(2) |
Amount paid |
| Fixed compensation |
380,000 |
380,000 |
380,000 |
380,000 |
| Non-deferred variable compensation paid in cash |
190,000 |
113,380 |
195,000 |
190,000 |
| Non-deferred variable compensation indexed to the Crédit
Agricole S.A. share price |
38,000 |
29,925 |
39,000 |
32,300 |
| Deferred and conditional variable compensation index-linked
to the share price of
Crédit Agricole S.A.
|
112,000 |
|
101,000 |
33,457 |
| Conditional Long-term incentive index-linked to the share
price of Crédit Agricole
S.A.
|
40,000 |
|
55,000 |
|
| Extraordinary compensation |
|
|
|
|
| Director's fees (1) |
|
|
|
|
| Benefits in kind |
6,028 |
6,028 |
6,028 |
6,028 |
| Total |
766,028 |
529,333 |
776,028 |
641,785 |
(1)
Only the Directors' fees paid by the companies referred to in Article L. 225-37-3,
paragraph 2, of the French Commercial Code are shown here.
(2)
Amounts set by Crédit Agricole CIB Board of Directors subject to the approval of the
General Meeting of 7 May 2019.
► Table 2 bis
- Details of the amounts of the deferred variable compensation vested
and paid
|
|
Value per share at award |
Vesting in 2017 |
| In euros |
|
Amount awarded |
Amount vested |
Amount paid(1) |
| Plan awarded in 2017 for 2016 |
€11.94 |
|
|
|
| Total |
|
|
|
|
|
|
Vesting in 2018 |
| In euros |
Amount awarded |
Amount vested |
Amount paid(2) |
| Plan awarded in 2017 for 2016 |
33,457 |
33,457 |
33,457 |
| Total |
33,457 |
33,457 |
33,457 |
(1)
The compensation shown in this table was awarded for the year indicated for the period
corresponding to the term of office. The detailed tables below distinguish between
compensation awarded for a particular year and compensation received during the year,
in his capacity as corporate officer.
(2)
No Crédit Agricole S.A. stock options were awarded to corporate officers in 2017 and
2018. No employee performance share plan has been set up within Crédit Agricole S.A.
or Crédit Agricole CIB.
Mr François Marion has been Deputy Chief Executive Officer since 18 May 2016. His
mandate was renewed by the Board of Directors on 31 October 2018.
FIXED COMPENSATION
For the 2018 financial year, Mr François Marion received annual fixed compensation
of €380,000. This compensation was set by the Board of Directors of Crédit Agricole
CIB on 9 May 2016, on the recommendation of the Compensation Committee, and has not
changed since.
VARIABLE COMPENSATION
Variable compensation
awarded in 2019 for 2018
At its meeting of 11 February 2019, the Board of Directors of Crédit Agricole CIB,
on the recommendation of the Compensation Committee of 5 February 2019, assessed the
attainment of targets and set the amount of the variable compensation for Mr François
Marion, in respect of the 2018 financial year, subject to the approval of the General
Meeting of Crédit Agricole CIB of 7 May 2019.
In light of the principles and criteria for determining, distributing and granting
the elements of compensation approved by the Crédit Agricole CIB General Meeting of
4 May 2018, the target achievement rate (50% of which corresponds to quantifiable
criteria and 50% to individual criteria) was set at 110%.
The variable compensation for the 2018 financial year of Mr François Marion is
made
up of a performance bonus of €335,000 (110% of the target) the awarding of which depends
on the attainment of targets, and long-term incentive plan awarded on the basis of
management assessment of €55,000, i.e. a total of €390,000. The variable compensation
may only be paid following the approval of the General Meeting of Crédit Agricole
CIB of 7 May 2019. Total variable compensation for the 2018 financial year breaks
down as follows:
| ― |
€195,000 paid from May 2019 upon approval by the Crédit Agricole
CIB General Meeting
of 7 May 2019.
|
| ― |
€39,000 indexed on the performance of the Crédit Agricole S.A.
share price and paid
in September 2019;
|
| ― |
€101,000 deferred and subject to the conditions set out in the
regulations of the
Crédit Agricole CIB plan.
|
| ― |
€55,000 deferred and subject to the conditions set out in the
regulations of the Crédit
Agricole S.A. plan.
|
Deferred and conditional
variable compensation vested in 2018 (for prior financial
years).
Under the deferred variable compensation of previous years, €33,457 was vested
in
2018 by Mr François Marion for an equivalent amount on the date of payment of €33,457
after indexation on the Crédit Agricole S.A. share price (value of the share on payment:
€11.97).
This amount includes:
| ― |
at the first tranche of the deferred variable compensation awarded
in 2017 for 2016,
vested in its entirety, i.e. €33,457 (share price as at the award date: €11.94);
|
EXTRAORDINARY
COMPENSATION
No extraordinary compensation was awarded or paid for the 2018 financial year.
DIRECTORS' FEES
Mr François Marion did not receive any Directors' fees from Crédit Agricole S.A.
or
companies controlled by Crédit Agricole CIB as of 31 December 2018 within the meaning
of Article L. 233-16 of the French Commercial Code.
SEVERANCE PAYMENT
(1)
In connection with his corporate office with Crédit Agricole CIB, Mr François Marion
is not entitled to any severance pay that will or may be owed in the event his position
is terminated or changed.
NON-COMPETITION
CLAUSE
No non-competition clause provided for Mr François Marion in connection with its
mandate.
SUPPLEMENTARY
PENSION SCHEME
No supplementary pension amount is payable to Mr François Marion in respect of
the
2018 financial year.
Mr François Marion benefits from a supplementary pension scheme from Crédit Agricole
CIB (closed scheme), which has been subject to the regulated agreements procedure
and whose details are presented in the special report of the Statutory Auditors for
the 2018 financial year.
As regards the defined-benefit pension plan, Mr François Marion has at least 15
years'
service and had already reached the maximum applicable replacement ratio before the
renewal of his corporate office as Deputy Chief Executive Officer. Consequently, his
renewed term of office does not entail any new conditional rights (supplementary replacement
ratio) as defined in paragraphs 2, 7 and 8 of Article L. 225-42-1 as amended by Law
No 2015990 of 6 August 2015. There is therefore no requirement to make the payment
of his supplementary pension scheme conditional on his performance and paragraphs
2, 7 and 8 of Article L. 225-42-1, as amended by Law No 2015-990 of 6 August 2015,
do not apply given that no new conditional rights apply to his renewed term of office.
The uncertain entitlements under the defined-benefit supplementary pension scheme
are subject to continued employment conditions at retirement and are estimated on
the basis of 35 years of service recorded on the closing date. At 31 December 2018,
there was no increase in the estimated conditional entitlements (expressed as a percentage
of the benchmark compensation) as compared to 31 December 2017.
On this basis, the provisions of Article L. 225-42-1 of the French Commercial Code,
modified by Law No 2015-990 of 6 August 2015 on economic growth, activity and equal
economic opportunities, which limits any increase in these conditional rights to 3%
per annum, were thus respected.
Mr François Marion's annual individual pension entitlements as at 31 December 2018
break down as:
| ― |
a life annuity under a defined-contribution supplementary pension,
estimated at €3,000
gross;
|
| ― |
a life annuity under a defined-benefit supplementary pension,
estimated at €166,000
gross.
|
BENEFITS IN KIND
The company provides Mr François Marion with a car. This benefit is treated as
an
in-kind benefit for tax purposes in accordance with current regulations.
(1)
As Deputy Chief Executive Officer, Mr François Marion is not concerned by the Afep-Medef
Code recommendations on the termination of Executive Corporate Officers' employment
contracts, which apply only to the Chairman, Chairman and Chief Executive Officer,
and CEO in companies with a Board of Directors.
♦ Mr. Régis Monfront
- Deputy chief executive officer until 11 July 2018
► Table 1 - Compensation,
shares and stock awarded to Executive Corporate Officers
of Crédit Agricole CIB
| In euros (gross amounts) |
2017 |
2018 |
| Compensation awarded in respect of the financial year
(1) |
716,866 |
373,699 |
| Value of options awarded during the year (2) |
|
|
| Value of free shares awarded during the year (2) |
|
|
(1)
The compensation shown in this table was awarded for the year indicated for the period
corresponding to the term of office. The detailed tables below distinguish the compensation
awarded for a particular year and the compensation received during the year, in his
capacity as corporate officer.
(2)
No Crédit Agricole S.A. stock options were awarded to corporate officers in 2017 and
2018. No employee bonus share plan has been set up within Crédit Agricole CIB.
► Table 2 - Summary
table of gross compensation amounts
| In euros |
2017 |
2018 |
| Régis Monfront Deputy Chief Executive
Officer until 11 July 2018 |
Amount awarded |
Amount paid |
Amount awarded(2) |
Amount paid |
| Fixed compensation |
380,000 |
380,000 |
200,075 |
200,075 |
| Non-deferred variable compensation paid in cash |
165,000 |
155,000 |
85,000 |
165,000 |
| Non-deferred variable compensation indexed to the Crédit
Agricole S.A. share price |
33,000 |
39,060 |
17,000 |
28,050 |
| Deferred and conditional variable compensation index-linked
to the share price of
Crédit Agricole S.A.
|
117,000 |
149,829 |
60 000 |
123,794 |
| Conditional Long-term incentive index-linked to the share
price of Crédit Agricole
S.A.
|
15,000 |
|
8,000 |
|
| Extraordinary compensation |
|
|
|
|
| Director's fees (1) |
|
|
|
|
| Benefits in kind |
6,866 |
6,866 |
3,624 |
3,624 |
| Total |
716,866 |
730,755 |
373,699 |
520,544 |
(1)
Only the Directors' fees paid by the companies referred to in Article L. 225-37-3,
paragraph 2, of the French Commercial Code are shown here.
(2)
Amounts set by Crédit Agricole CIB Board of Directors subject to the approval of the
General Meeting of 7 May 2019.
► Table 2 bis
- Details of the amounts of the deferred variable compensation vested
and paid
|
|
Value per share at award |
Vesting in 2017 |
| In euros |
|
Amount awarded |
Amount vested |
Amount paid |
| Plan awarded in 2014 for 2013 |
€11.37 |
35,202 |
35,202 |
46,467 |
| Plan awarded in 2015 for 2014 |
€12.86 |
38,001 |
38,001 |
44,462 |
| Plan awarded in 2016 for 2015 |
€9.67 |
38,000 |
38,000 |
58,900 |
| Plan awarded in 2017 for 2016 |
€11.94 |
|
|
|
| Total |
|
111,203 |
111,203 |
149,829 |
|
|
Vesting in 2018 |
| In euros |
Amount awarded |
Amount vested |
Amount paid(2) |
| Plan awarded in 2014 for 2013 |
|
|
|
| Plan awarded in 2015 for 2014 |
38,001 |
38,001 |
35,341 |
| Plan awarded in 2016 for 2015 |
38,000 |
38,000 |
47,120 |
| Plan awarded in 2017 for 2016 |
41,333 |
41,333 |
41,333 |
| Total |
117,334 |
117,334 |
123,794 |
(1)
The share price at the payment date is €15.01 for the deferred variable compensation
vested in 2017.
(2)
The share price at the payment date is €11.97 for the deferred variable compensation
vested in 2018.
Mr Régis Monfront has been the Deputy Chief Executive Officer of Crédit Agricole
CIB
since 15 December 2011 and completed his term on 11 July 2018.
FIXED COMPENSATION
Mr Régis Monfront received fixed compensation of €200,075 (€380,000 on an annual
basis)
in respect of the corporate office held at Crédit Agricole CIB until 11 July 2018.
This compensation was set by the Board of Directors of Crédit Agricole CIB on 1 August
2013 on the proposal of the Compensation Committee and remained unchanged until the
end of his term of office.
VARIABLE COMPENSATION
Variable compensation
awarded in 2019 for 2018
At its meeting of 11 February 2019, the Crédit Agricole CIB Board of Directors,
on
the recommendation of the Compensation Committee on 5 February 2019, reviewed the
achievement of objectives and approved the amount of Mr Régis Monfront's variable
compensation for the 2018 financial year, subject to the approval of the Crédit Agricole
CIB General Meeting of 7 May 2019.
In light of the principles and criteria for setting, distributing and granting
elements
of compensation approved by the Crédit Agricole CIB General Meeting of 4 May 2018,
the target achievement rate (50% of which corresponds to quantifiable criteria and
50% to individual criteria) was set at 99%.
The amount of variable compensation for Mr Régis Monfront for the corporate office
held at Crédit Agricole CIB until 11 July 2018 consists of a performance bonus of
€162,000 and long-term incentive plan of €8,000 i.e. a total of €170,000. The variable
compensation may only be paid following the approval of the General Meeting of Crédit
Agricole CIB of 7 May 2019.
The total variable compensation for the corporate office held at Crédit Agricole
CIB
until 11 July 2018 breaks down as follows:
| ― |
€85,000 paid from May 2019 upon approval by the Crédit Agricole
CIB General Meeting
of 7 May 2019;
|
| ― |
€17,000 indexed on the Crédit Agricole S.A. share price and paid
in September 2019;
|
| ― |
€60,000 deferred and subject to the conditions set out in the
regulations of the Crédit
Agricole CIB plan.
|
| ― |
€8,000 deferred and subject to the conditions set out in the
regulations of the Crédit
Agricole S.A. plan.
|
Deferred and conditional
variable compensation vested in 2018 (for prior financial
years).
As deferred variable compensation for prior years, €117,334 was vested in 2018
in
favour of Mr Régis Monfront for an amount equivalent to €123,794 on the payment date
after indexing to the Crédit Agricole S.A. share price (share price as at the payment
date: €11.97).
This amount includes:
| ― |
at the first tranche of the deferred variable compensation awarded
in 2017 for 2016,
vested in its entirety, i.e. €41,333 (share price as at the award date: €11.94);
|
| ― |
at the second tranche of the deferred variable compensation awarded
in 2016 for 2015,
vested in its entirety, i.e. €38,000 (share price as at the award date: €9.67);
|
| ― |
at the third tranche of the deferred variable compensation awarded
in 2015 for 2014,
vested in its entirety, i.e. €38,001 (share price as at the award date: €12.86).
|
EXTRAORDINARY
COMPENSATION
In respect of the corporate office held at Crédit Agricole CIB until 11 July 2018,
no exceptional compensation was awarded or paid to Mr Régis Monfront.
DIRECTORS' FEES
Mr Régis Monfront did not receive any Directors' fees from Crédit Agricole S.A.
or
companies controlled by Crédit Agricole CIB as of 31 December 2018 within the meaning
of Article L. 233-16 of the French Commercial Code.
SEVERANCE PAYMENT
(1)
In respect of the corporate office held at Crédit Agricole CIB until 11 July 2018,
Mr Régis Monfront did not benefit from any severance payment that is or may be owed
in the event his position is terminated or changed.
NON-COMPETITION
CLAUSE
No non-competition clause provided for M.Régis Monfront in connection with its
mandate.
SUPPLEMENTARY
PENSION SCHEME
No additional pension benefit was due to Mr Régis Monfront in respect of the corporate
office held at Crédit Agricole CIB until 11 July 2018.
In respect of the corporate office held at Crédit Agricole CIB until 11 July 2018,
Mr Régis Monfront benefited from the Crédit Agricole CIB additional pension scheme
(closed scheme), which was subject to the regulated agreements procedure and the details
of which are presented in the special report of the Statutory Auditors for the 2016
financial year.
As regards the defined-benefit pension plan, Mr Régis Monfront already has at least
fifteen years service and had already reached the maximum applicable replacement ratio
prior to the renewal in 2016 of his term of office as Deputy Chief Executive Officer
ending on 11 July 2018. Consequently, the term of office held until 11 July 2018 will
not bring new conditional entitlements (additional replacement rates) as referred
to in paragraphs 2, 7 and 8 of article L. 225-42-1 modified by law 2015-990 of 6 August
2015. The implementation of the additional pension regulation with any performance
condition and paragraphs 2, 7 and 8 of article L. 225-42-1 modified by law no. 2015-990
of 6 August 2015 are not applied if new conditional entitlements are not vested over
the period of the renewed term of office.
The uncertain entitlements under the defined-benefit supplementary pension scheme
are subject to continued employment conditions at retirement and are estimated on
the basis of 36 years and 7 months of service recorded on 11 July 2018. On this date,
there was no increase in the estimated conditional entitlements (expressed as a percentage
of the benchmark compensation).
On this basis, the provisions of Article L. 225-42-1 of the French Commercial Code,
modified by Law No 2015-990 of 6 August 2015 on economic growth, activity and equal
economic opportunities, which limits any increase in these conditional rights to 3%
per annum, were thus respected.
Mr Régis Monfront's annual individual pension entitlements estimated as at 11 July
2018 break down as:
| ― |
a life annuity under a defined-contribution supplementary pension,
estimated at €5,000
gross;
|
| ― |
a life annuity under a defined-benefit supplementary pension,
estimated at €164,000
gross.
|
BENEFITS IN KIND
In respect of the corporate office held at Crédit Agricole CIB until 11 July 2018,
Mr Régis Monfront was provided with a company car. This benefit is treated as an in-kind
benefit for tax purposes in accordance with current regulations.
(1)
As Deputy Chief Executive Officer, Mr Régis Monfront is not concerned by the Afep-Medef
Code recommendations on the termination of Executive Corporate Officers' employment
contracts, which apply only to the Chairman, Chairman and Chief Executive Officer,
and CEO in companies with a Board of Directors.
♦ Mr. Jacques
Prost - Deputy chief executive officer until 17 June 2018
► Table 1 - Compensation,
shares and stock awarded to Executive Corporate Officers
of Crédit Agricole CIB
| In euros (gross amounts) |
2017 |
2018 |
| Compensation awarded in respect of the financial year
(1) |
956,644 |
425,768 |
| Value of options awarded during the year (2) |
|
|
| Value of free shares awarded during the year (2) |
|
|
(1)
The compensation shown in this table was awarded for the year indicated for the period
corresponding to the term of office. The detailed tables below distinguish the compensation
awarded for a particular year and the compensation received during the year, in his
capacity as corporate officer.
(2)
No Crédit Agricole S.A. stock options were awarded to corporate officers in 2017 and
2018. No employee bonus share plan has been set up within Crédit Agricole CIB.
► Table 2 - Summary
table of gross compensation amounts
| In euros |
2017 |
2018 |
| Jacques Prost Deputy Chief Executive
Officer until 17 June 2018 |
Amount awarded |
Amount paid |
Amount awarded(2) |
Amount paid |
| Fixed compensation |
450,000 |
450,000 |
207,142 |
207,142 |
| Non-deferred variable compensation paid in cash |
200,000 |
192,500 |
89,000 |
200,000 |
| Non-deferred variable compensation indexed to the Crédit
Agricole S.A. share price |
50,000 |
59,850 |
21,500 |
42,500 |
| Deferred and conditional variable compensation index-linked
to the share price of
Crédit Agricole S.A.
|
165,000 |
193,100 |
74,500 |
214,745 |
| Conditional Long-term incentive index-linked to the share
price of Crédit Agricole
S.A.
|
85,000 |
|
30,000 |
|
| Extraordinary compensation |
|
|
|
|
| Director's fees (1) |
|
|
|
|
| Benefits in kind |
6,644 |
6,644 |
3,626 |
3,626 |
| Total |
956,644 |
902,094 |
425,768 |
668,015 |
(1)
Only the Directors' fees paid by the companies referred to in Article L. 225-37-3,
paragraph 2, of the French Commercial Code are shown here.
(2)
Amounts set by Crédit Agricole CIB Board of Directors subject to the approval of the
General Meeting of 7 May 2019.
► Table 2 bis
- Details of the amounts of the deferred variable compensation vested
and paid
|
|
Value per share at award |
Vesting in 2017 |
| In euros |
|
Amount awarded |
Amount vested |
Amount paid(1) |
| Plan awarded in 2014 for 2013 |
€11.37 |
16,742 |
16,742 |
22,100 |
| Plan awarded in 2015 for 2014 |
€12.86 |
66,666 |
66,666 |
78,000 |
| Plan awarded in 2016 for 2015 |
€9.67 |
60,000 |
60,000 |
93,000 |
| Plan awarded in 2017 for 2016 |
€11.94 |
|
|
|
| Total |
|
143,408 |
143,408 |
193,100 |
|
|
Vesting in 2018 |
| In euros |
Amount awarded |
Amount vested |
Amount paid(2) |
| Plan awarded in 2014 for 2013 |
|
|
|
| Plan awarded in 2015 for 2014 |
66,679 |
66,679 |
62,012 |
| Plan awarded in 2016 for 2015 |
60,000 |
60,000 |
74,400 |
| Plan awarded in 2017 for 2016 |
78,333 |
78,333 |
78,333 |
| Total |
205,012 |
205,012 |
214,745 |
(1)
The share price at the payment date is €15.01 for the deferred variable compensation
vested in 2017.
(2)
The share price at the payment date is €11.97 for the deferred variable compensation
vested in 2018.
Mr Jacques Prost was Deputy Chief Executive Officer from 26 August 2013 and ended
his term on 17 June 2018.
FIXED COMPENSATION
Mr Jacques Prost received fixed compensation of €207,142 (€450,000 on an annual
basis)
in respect of the corporate office held at Crédit Agricole CIB until 17 June 2018.
This compensation was set by the Board of Directors of Crédit Agricole CIB on 9 May
2016 on the proposal of the Compensation Committee and remained unchanged until the
end of his term of office.
VARIABLE COMPENSATION
Variable compensation
awarded in 2019 for 2018
At its meeting of 11 February 2019, the Board of Directors of Crédit Agricole CIB,
on the recommendation of the Compensation Committee of 5 February 2019, assessed the
attainment of targets and set the amount of the variable compensation for Mr Jacques
Prost, in respect of the 2018 financial year, subject to the approval of the General
Meeting of Crédit Agricole CIB of 7 May 2019.
In light of the principles and criteria for setting, distributing and granting
elements
of compensation approved by the Crédit Agricole CIB General Meeting of 7 May 2019,
the target achievement rate (50% of which corresponds to quantifiable criteria and
50% to individual criteria) was set at 112.5%.
The amount of variable compensation for Mr Jacques Prost for the corporate office
held at Crédit Agricole CIB until 17 June 2018 consists of a performance bonus of
€185,000 and long-term incentive plan of €30,000 i.e. a total of €215,000. The variable
compensation may only be paid following the approval of the General Meeting of Crédit
Agricole CIB of 7 May 2019.
The total variable compensation breaks down as follows:
| ― |
€89,000 paid from May 2019 upon approval by the Crédit Agricole
CIB General Meeting
of 7 May 2019;
|
| ― |
€21,500 indexed on the Crédit Agricole S.A. share price and paid
in September 2019;
|
| ― |
€74,500 deferred and subject to the conditions set out in the
regulations of the Crédit
Agricole CIB plan.
|
| ― |
€30,000 deferred and subject to the conditions set out in the
regulations of the Crédit
Agricole S.A. plan (Long-term Incentive Plan).
|
Deferred and conditional
variable compensation vested in 2018 (for prior financial
years).
As deferred variable compensation for prior years, €205,012 was vested in 2018
in
favour of Mr Jacques Prost, in his capacity as corporate officer, for an amount equivalent
to €214,745 on the payment date after indexing to the Crédit Agricole S.A. share price
(share price as at the payment date: €11.97).
This amount includes:
| ― |
at the first tranche of the deferred variable compensation awarded
in 2017 for 2016,
vested in its entirety, i.e. €78,333 (share price as at the award date: €11.94);
|
| ― |
at the second tranche of the deferred variable compensation awarded
in 2016 for 2015,
vested in its entirety, i.e. €60,000 (share price as at the award date: €9.67);
|
| ― |
at the third tranche of the deferred variable compensation awarded
in 2015 for 2014,
vested in its entirety, i.e. €66,679 (share price as at the award date: €12.86).
|
EXTRAORDINARY
COMPENSATION
In respect of the corporate office held at Crédit Agricole CIB until 17 June 2018,
no exceptional compensation was awarded or paid to Mr Jacques Prost.
DIRECTORS' FEES
Mr Jacques Prost did not receive any Directors' fees from Crédit Agricole S.A.
or
companies controlled by Crédit Agricole CIB as of 31 December 2018 within the meaning
of Article L. 233-16 of the French Commercial Code.
SEVERANCE PAYMENT
(1)
In respect of the corporate office held at Crédit Agricole CIB until 17 June 2018,
Mr Jacques Prost did not benefit from any severance payment that is or may be owed
in the event his position is terminated or changed.
NON-COMPETITION
CLAUSE
No non-competition clause provided for M.Jacques Prost in connection with its mandate.
SUPPLEMENTARY
PENSION SCHEME
No additional pension benefit was due to Mr Jacques Prost in respect of the corporate
office held at Crédit Agricole CIB until 17 June 2018.
Mr Jacques Prost is a beneficiary of the supplementary pension scheme for Crédit
Agricole
Executive Managers, which supplements the collective and mandatory retirement pension
and death and disability schemes that were subject to the regulated agreements procedure,
the details of which are set forth in the Statutory Auditors' special report for the
2016 financial year.
As this comes under the defined-benefit plan, the annual vesting of entitlements
is
conditional on Crédit Agricole CIB's performance conditions, in accordance with Article
L. 225-42-1 of the French Commercial Code as amended by Law No 2015-990 of 6 August
2015. The annual vesting of Mr Prost's entitlements is therefore subject, in accordance
with the Board of Directors decision of 2 November 2016, to a performance condition
corresponding to Crédit Agricole CIB achieving at least 50% of the Net Income Group
Share target for Corporate and Investment Bank (CIB) activities as adjusted:
| ― |
the positive or negative effects of the Mark to Market valuation
of loan hedges for
CPM and Debt Valuation Adjustment (DVA);
|
| ― |
the effects of the initial application of the new CVA, DVA and
FVA rules;
|
| ― |
impairment of goodwill.
|
This condition is deemed met if Crédit Agricole CIB does not achieve this target
due
to an adverse market environment similarly affecting Crédit Agricole CIB's competitors.
The Board of Directors meeting on 11 February 2019 validated the achievement of
the
performance condition for the 2018 financial year.
The uncertain entitlements under the defined-benefit supplementary pension scheme
are subject to continued employment conditions at retirement and are estimated on
the basis of four years and ten months of service recorded on 17 June 2018, corresponding
to 5.1% of the reference compensation at 31 December 2017, giving an increase in the
conditional entitlements of +0.6% compared to the 2017 financial year.
This ensures compliance with the provision of Article L. 225-42-1 of the French
Commercial
Code, as amended by Law No 2015990 of 6 August 2015 on economic growth, activity and
equal opportunities, limiting the annual increase in conditional rights to 3%. Mr
Jacques Prost's annual and conditional individual pension entitlements as at 17 June
2018 break down as:
| ― |
a life annuity under a defined-contribution supplementary pension,
estimated at €5,000
gross;
|
| ― |
a life annuity under a defined-benefit supplementary pension,
estimated at €35,000
gross.
|
BENEFITS IN KIND
In respect of the corporate office held at Crédit Agricole CIB until 17 June 2018,
Mr Jacques Prost was provided with a company car. This benefit is treated as an in-kind
benefit for tax purposes in accordance with current regulations.
(1)
As Deputy Chief Executive Officer, Mr Jacques Prost is not concerned by the Afep-MEDEF
Code recommendations on the termination of Executive Corporate Officers' employment
contracts, which apply only to the Chairman, Chairman and Chief Executive Officer,
and CEO in companies with a Board of Directors.
OTHER COMPENSATION
PAID BY CRÉDIT AGRICOLE S.A. IN CONNECTION WITH THE OFFICE OF CHIEF
EXECUTIVE OFFICER OF THAT COMPANY
♦ Mr. Philippe
Brassac - Chairman of the board of directors of Crédit Agricole CIB
since 20 may 2015
Mr Philippe Brassac, Chairman of the Board of Directors, waived his right to Directors'
fees as of 20 May 2015 and for the duration of his term of office. Neither does he
receive from Crédit Agricole CIB any compensation or benefits of any nature whatsoever.
The information set out here below concerns the office of the Chief Executive Officer
of Crédit Agricole S.A.
► Table 1 - Compensation,
shares and stock awarded to Executive Corporate Officers
of Crédit Agricole CIB
| In euros (gross amounts) |
2017 |
2018 |
| Compensation awarded in respect of the financial year
(1) |
2,020,744 |
2,214,767 |
| Value of options awarded during the year (2) |
|
|
| Value of free shares awarded during the year (2) |
|
|
(1)
The compensation shown in this table was awarded for the year indicated for the period
corresponding to the term of office. The detailed tables below distinguish between
compensation awarded for a particular year and compensation received during the year.
(2)
No Crédit Agricole S.A. stock options were awarded to corporate officers in 2017 and
2018. No employee bonus share plan has been set up within Crédit Agricole CIB.
► Table 2 - Summary
table of gross compensation amounts
| In euros |
2017 |
2018 |
| Philippe Brassac Chairman of the
Board of Directors since 20 May 2015 (compensation
paid to Mr Philippe Brassac by Crédit Agricole S.A. in respect of his role as Chief
Executive Officer of Crédit Agricole S.A.)
|
Amount awarded |
Amount paid |
Amount awarded |
Amount paid |
| Fixed compensation |
900,000 |
900,000 |
1,025,269 |
1,025,269 |
| Non-deferred variable compensation paid in cash |
312,540 |
295,620 |
346,740 |
312,540 |
| Non-deferred variable compensation indexed to the Crédit
Agricole S.A. share price |
104,180 |
124,161 |
115,580 |
88,553 |
| Deferred and conditional variable compensation index-linked
to the share price of
Crédit Agricole S.A.
|
625,080 |
179,800 |
93,480 |
340,920 |
| Extraordinary compensation |
|
|
|
|
| Director's fees (1) |
|
|
|
|
| Benefits in kind |
78,944 |
78,944 |
33,698 |
33,698 |
| Total |
2,020,744 |
1,578,525 |
2,214,767 |
1,800,980 |
(1)
Amounts set by Crédit Agricole S.A. Board of Directors subject to the approval of
the General Meeting of Crédit Agricole S.A. of 21 May 2019.
► Table 2 bis
- Details of the amounts of the deferred variable compensation vested
and paid
|
|
Valeur de l'action à l'attribution |
Acquisitions en 2017 |
| In euros |
|
Montant attribué |
Montant acquis |
Montant versé(1) |
| Plan awarded in 2016 for 2015 |
€9.67 |
116,000 |
116,000 |
179,800 |
| Plan awarded in 2017 for 2016 |
€11.94 |
|
|
|
| Total |
|
116,000 |
116,000 |
179,800 |
|
|
Acquisitions en 2018 |
| In euros |
Montant attribué |
Montant acquis |
Montant versé(2) |
| Plan awarded in 2016 for 2015 |
116,000 |
116,000 |
143,840 |
| Plan awarded in 2017 for 2016 |
197,080 |
197,080 |
197,080 |
| Total |
313,080 |
313,080 |
340,920 |
(1)
The share price at the payment date is €15.01 for the deferred variable compensation
vested in 2017.
ITEMS OF COMPENSATION
OF MR PHILIPPE BRASSAC AS CHIEF EXECUTIVE OFFICER OF CRÉDIT
AGRICOLE S.A.
FIXED COMPENSATION
Mr Philippe Brassac receives annual fixed compensation of €1,100,000. This compensation
was set at the Crédit Agricole S.A. Board of Directors meeting of 13 February 2018
and approved by the General Meeting of 16 May 2018 and has not been changed since
then.
VARIABLE COMPENSATION
Variable compensation
awarded in 2019 for 2018
At its meeting of 13 February 2019, the Board of Directors of Crédit Agricole S.A.,
on the recommendation of the Compensation Committee, set the amount of the variable
compensation for Mr Philippe Brassac in respect of the 2018 financial year, subject
to the approval of the General Meeting of Crédit Agricole S.A. of 21 May 2019.
In light of the principles and criteria for determining, distributing and granting
elements of compensation approved by the General Meeting of Crédit Agricole CIB of
21 May 2019, the amount of the variable compensation for Mr Philippe Brassac, in respect
of the 2018 financial year, was set at €1,155,800, giving a target achievement rate
of 112.7%, equivalent to 112.7% of his benchmark fixed compensation.
This compensation breaks down as follows:
| ― |
€346,740 paid in June 2019;
|
| ― |
€115,580 indexed on the Crédit Agricole S.A. share price and
paid in September 2019;
|
| ― |
€693,480 subjected to the conditions laid down on the regulation
of the Crédit Agricole
S.A. plan.
|
Deffered variable
compensation vested in 2018 (table 2 bis above)
With respect to the deferred variable compensation in previous years, €313,080
were
vested by Mr Philippe Brassac for an amount equivalent to €340,920 on the payment
date, following index-linking to the Crédit Agricole S.A. share price. This amount
includes:
| ― |
the first year's payment of the deferred variable compensation
awarded in 2017 for
2016. For this tranche, €197,080 were granted, at a share price of €11.94 on the date
of granting;
|
| ― |
the second year's payment of the deferred variable compensation
awarded in 2016 for
2015. For this tranche, €116,000 was granted, at a share price of €9.67 on the grant
date;
|
EXTRAORDINARY
COMPENSATION
No extraordinary compensation was awarded or paid for the 2018 financial year.
DIRECTORS' FEES
Mr Philippe Brassac has waived his right to receive Directors' fees in connection
with his terms of office as Director of Crédit Agricole S.A. Group companies for the
full duration of his term of office.
SEVERANCE PAYMENT
No severance benefit was paid to Mr Philippe Brassac during the financial year.
In
the event of the termination of his position by Crédit Agricole S.A., under the conditions
authorised by the Board on 19 May 2015 and approved by the General Meeting on 19 May
2016, Mr Philippe Brassac will be paid compensation for termination of contract.
NON-COMPETITION
CLAUSE
In the event of termination of his position as Chief Executive Officer, on whatever
grounds, Mr Brassac may be bound by a non-competition clause for a period of one year
from the date of termination, as authorised by the Board on 19 May 2015 and approved
by the General Meeting on 19 May 2016.
SUPPLEMENTARY
PENSION SCHEME
No supplemental pension amount is payable to Mr Philippe Brassac in respect of
the
2018 financial year.
As a Corporate Officer of Crédit Agricole S.A., Mr Philippe Brassac continues to
be
a member of the supplementary pension schemes in place for the Group's Senior Executives,
in addition to the collective and mandatory pension and death & disability schemes.
The additional annuity paid by these schemes will be reduced, where appropriate, so
that the annual aggregate annuity taken together with the annuities of all Group defined-contribution
schemes and other mandatory schemes does not exceed 16 times the annual Social Security
cap as of the date of liquidation.
Since the Board of Directors of Crédit Agricole S.A. on 19 May 2015 approved Mr
Philippe
Brassac's participation in the supplementary pension schemes of the Crédit Agricole
S.A. Group, prior to the publication date of Law No 2015-990 of 6 August 2015 on economic
growth, activity and equal opportunities, the provisions of Article L. 225-42-1 of
the French Commercial Code subjecting the annual vesting of supplementary pension
entitlements to meeting performance conditions do not apply. His participation was
also duly approved under the terms of Article L. 225-42-1, paragraph 1, of the French
Commercial Code by the Board of Directors of Crédit Agricole CIB.
In accordance with the provisions of Article L. 225-37-3 of the French Commercial
Code, as amended in the framework of Law No 2015-990 of 6 August 2015 on economic
growth, activity and equal economic opportunities, Mr Philippe Brassac's annual and
conditional individual supplementary pension entitlements as at 31 December 2018 break
down as:
| ― |
a life annuity under a defined-contribution supplementary pension,
estimated at €5,000
gross;
|
| ― |
a life annuity under a defined-benefit supplementary pension,
estimated at €519,000
gross.
|
The estimated total of these supplementary pension entitlements, taken together
with
estimated pensions from mandatory retirement schemes, triggers the application of
the contractual cap of 16 times the annual social security cap as of the closing date,
for all schemes. The uncertain entitlements under the defined-benefit supplementary
pension scheme are subject to continued employment conditions at retirement and are
estimated on the basis of thirty-five (36) years of service recorded in the reporting
period, corresponding to 34% of the reference compensation at 31 December 2018, representing
zero increase in conditional entitlements in comparison with the 2017 financial year.
On this basis, the provisions of Article L. 225-42-1 of the French Commercial Code,
modified by Law No 2015-990 of 6 August 2015 on economic growth, activity and equal
economic opportunities, which limits any increase in these conditional rights to 3%
per annum, were thus respected.
The published estimated amounts are the gross amounts before taxes and social security
charges applicable at the closing date, particularly income tax payable by individuals
and supplementary contributions of 7% and 14%, payable by the beneficiary, which are
deducted from the life annuities payable under the defined benefit supplementary pension
scheme.
BENEFITS IN KIND
Since the end of May 2018, Mr Philippe Brassac has no longer benefited from benefits
in kind, which have been incorporated into his fixed salary.
| Table 3 |
Directors' fees received by members of the Board of Directors
of Crédit Agricole CIB
(see 1.4.6 page 131).
|
| Table 4 |
Stock options granted in the 2018 financial year to Executive
Corporate Officers by
Crédit Agricole CIB. No stock options were awarded to Executive Corporate Officers
in 2018.
|
| Table 5 |
Stock options exercised by Executive Corporate Officers
in 2018. No Crédit Agricole
S.A. stock options were exercised by Executive Corporate Officers in 2018.
|
| Table 6 |
Performance shares awarded to Executive Corporate Officers
in 2018. No performance
share plan has been set up by Crédit Agricole CIB.
|
| Table 7 |
Performance shares made available in 2018 for Executive
Corporate Officers. Not applicable.
No performance share plan has been set up by Crédit Agricole CIB.
|
| Table 8 |
History of stock options granted. Not applicable. |
| Table 9 |
History of performance shares granted. Not applicable. |
| Table 10 |
Summary of multi-annual variable compensation received
by each Executive Corporate
Officer. Not applicable.
|
► Table 11 - Employment
contract/supplementary pension scheme/severance payment/ non-competition
clause indemnity
| Corporate officers |
Employment contract |
Supplementary pension
scheme |
Indemnities or benefits
that will or may be owed in the event of termination or change
in office
|
|
|
Yes |
No |
Yes |
No |
Yes |
No |
| Philippe Brassac Chairman of the Board of Directors Term
of office started: 20 May
2015
|
X with Crédit Agricole S.A. (contract suspended) |
|
X |
|
X with Crédit Agricole S.A. |
|
| Jean-Yves Hocher Chief Executive Officer Term of office
started: 1 December 2010 Term
of office ended: 31 October 2018
|
X with Crédit Agricole S.A. (re-activated 01.09.2015) |
|
X with Crédit Agricole S.A. (in respect of his employment
contract with Crédit Agricole
S.A.)
|
|
X with Crédit Agricole S.A. (in respect of his employment
contract with Crédit Agricole
S.A.)
|
|
| Jacques Ripoll Chief Executive Officer Term of office
started: 1 November 2018 |
X with Crédit Agricole S.A. |
|
X with Crédit Agricole S.A. (in respect of his employment
contract with Crédit Agricole
S.A.)
|
|
|
X |
| François Marion Deputy Chief Executive Officer Term of
office started: 18 May 2016 |
X with Crédit Agricole CIB (contract suspended) |
|
X |
|
|
X |
| Régis Monfront Deputy Chief Executive Officer Term of
office started: 15 December
2011 Term of office ended: 11 July 2018
|
X with Crédit Agricole CIB (contract suspended) |
|
X |
|
|
X |
| Jacques Prost Deputy Chief Executive Officer Term of
office started: 26 August 2013
Term of office ended: 17 June 2018
|
X with Crédit Agricole S.A. (contract suspended) |
|
X |
|
|
X |
| Corporate officers |
Indemnity under a
noncompetition clause |
|
|
Yes |
No |
| Philippe Brassac Chairman of the Board of Directors Term
of office started: 20 May
2015
|
X with Crédit Agricole S.A. |
|
| Jean-Yves Hocher Chief Executive Officer Term of office
started: 1 December 2010 Term
of office ended: 31 October 2018
|
|
X |
| Jacques Ripoll Chief Executive Officer Term of office
started: 1 November 2018 |
X with Crédit Agricole S.A. (in respect of his employment
contract with Crédit Agricole
S.A.)
|
|
| François Marion Deputy Chief Executive Officer Term of
office started: 18 May 2016 |
|
X |
| Régis Monfront Deputy Chief Executive Officer Term of
office started: 15 December
2011 Term of office ended: 11 July 2018
|
|
X |
| Jacques Prost Deputy Chief Executive Officer Term of
office started: 26 August 2013
Term of office ended: 17 June 2018
|
|
X |
COMPENSATION ITEMS
OWED OR GRANTED FOR THE 2017 FINANCIAL YEAR TO EACH OF THE COMPANY'S
EXECUTIVE CORPORATE OFFICERS AND SUBJECT TO SHAREHOLDER APPROVAL
In accordance with the provisions of Article L. 225-100 of the French Commercial
Code,
amended by Law No 2016-1691 of 9 December 2016 in relation to transparency, the fight
against corruption and modernisation of the economy, and in view of the vote of the
General Meeting of 4 May 2018 on the compensation policy envisaged for the financial
year ended 31 December 2018, the fixed, variable and extraordinary elements comprising
the total compensation and benefits of all kinds, in respect of the previous year
ended 31 December, paid or granted to Executive Corporate Officers of Crédit Agricole
CIB are subject to shareholder approval:
| ― |
the fixed portion;
|
| ― |
the annual variable portion and, where necessary, the multiannual
variable part, together
with the objectives that contribute to the determination of this variable portion;
|
| ― |
extraordinary compensation;
|
| ― |
stock options, bonus shares and any other long-term items of
compensation;
|
| ― |
benefits linked to taking up or terminating office;
|
| ― |
the increase in conditional annual supplementary defined benefit
pension rights mentioned
in Article L. 137-11 of the French Social Security Code granted to the Executive Corporate
Officers of Crédit Agricole CIB;
|
| ― |
benefits of all types.
|
Consequently, the General Meeting of 7 May 2019 is asked to approve the elements
of
compensation owed or awarded in respect of 2018 to each Executive Corporate Officer
of Crédit Agricole CIB:
| ― |
Mr Philippe Brassac;
|
| ― |
Mr Jean-Yves Hocher;
|
| ― |
Mr Jacques Ripoll;
|
| ― |
Mr François Marion;
|
| ― |
Mr Régis Monfront;
|
| ― |
Mr Jacques Prost;
|
♦ Compensation
items owed or granted in respect of the 2017 financial year to mr philippe
brassac, chairman of the board of directors submitted for shareholder approval
Mr Philippe Brassac, Chairman of the Board of Directors, waived his right to Directors'
fees as of 20 May 2015 and for the duration of his term of office. Neither does he
receive from Crédit Agricole CIB any compensation or benefits of any nature whatsoever.
Thus, as regards Mr Philippe Brassac, no element of compensation owed or granted in
respect of the 2018 financial year will be submitted for the approval of the General
Meeting.
♦ Compensation
items owed or granted in respect of the 2018 financial year to Mr Jean-Yves
Hocher, Chief Executive Officer until 31 October 2018, submitted for shareholder approval
Mr Jean-Yves Hocher carried out his office of Chief Executive Officer without payment
from 1 September 2015 to 31 October 2018 (inclusive). Over this period, Mr Jean-Yves
Hocher did not receive any compensation or benefits, of any kind whatsoever, from
Crédit Agricole CIB.
Thus, as regards Mr Jean-Yves Hocher, no element of compensation owed or granted
in
respect of the 2018 financial year will be submitted for the approval of the General
Meeting.
♦ Compensation
items owed or granted in respect of the 2018 financial year to Mr Jacques
Ripoll, Chief Executive Officer since 1 November, submitted for shareholder approval
Mr Jacques Ripoll carried out his office of Chief Executive Officer without payment
from 1 November 2018. Consequently, since that date, Mr Jacques Ripoll has not received
any compensation or benefits, of any kind whatsoever, from Crédit Agricole CIB.
Thus, as regards Mr Jacques Ripoll, no element of compensation owed or granted
in
respect of the 2018 financial year will be submitted for the approval of the General
Meeting.
For information purposes, it is recalled that the regulated commitments benefitting
Mr Jacques Ripoll are borne by Crédit Agricole S.A. under his employment contract.
COMPENSATION ITEMS
OWED OR GRANTED IN RESPECT OF THE 2018 FINANCIAL YEAR TO MR FRANÇOIS
MARION, DEPUTY CHIEF EXECUTIVE OFFICER, SUBMITTED FOR SHAREHOLDER APPROVAL
► Compensation
items owed or awarded in respect of the financial year ended, subject
to shareholder approval
|
|
Montants or book value |
Description |
| Fixed compensation |
€380,000 |
Mr François Marion receives gross fixed annual compensation
of €380,000. This compensation
was set by the Board of Directors of Crédit Agricole CIB on 9 May 2016, on the recommendation
of the Compensation Committee, and has not changed since.
|
| Annual variable compensation |
€390,000 |
At its meeting of 11 February 2019, the Board of Directors
of Crédit Agricole CIB,
on the recommendation of the Compensation Committee of 5 February 2019, assessed the
attainment of targets and set the amount of the variable compensation for Mr François
Marion, in respect of the 2018 financial year, subject to the approval of the General
Meeting of Crédit Agricole CIB of 7 May 2019. The target achievement rate, 50% of
which corresponds to quantifiable criteria and 50% to individual criteria, was set
at 110%. In light of the principles and criteria for determining, allocating and distributing
compensation items approved by the General Meeting of Crédit Agricole CIB of 4 May
2018, the amount of the variable compensation for Mr François Marion, in respect of
the 2018 financial year, consists of a performance bonus of €335,000 and a Long-Term
Incentive of €55,000, amounting to a total sum of €390,000. The variable compensation
may only be paid following the approval of the General Meeting of Crédit Agricole
CIB of 7 May 2019.
|
| Extraordinary compensation |
No payment |
Mr François Marion did not receive any extraordinary
compensation for 2018. |
| Stock options, performance shares or any other long-term
compensation |
No payment |
Mr François Marion was not granted any stock options
or performance shares or any
other element of long-term compensation for 2018.
|
| Director's fees |
No payment |
Mr François Marion did not receive any Directors' fees
from Crédit Agricole S.A. or
from companies controlled by Crédit Agricole CIB as of 31 December 2018 within the
meaning of Article L. 233-16 of the French Commercial Code.
|
| Benefits in kind |
€6,028 |
The company paid a benefit in kind in the form of a car.
This benefit is treated as
an in-kind benefit for tax purposes in accordance with current regulations.
|
► Components of
compensation owed or awarded during the past financial year on which
a General Meeting will vote or has voted in accordance with the procedure governing
related-party agreements and commitments
|
|
Amounts |
Description |
| Severance payment |
No payment |
In connection with his corporate office with Crédit Agricole
CIB, Mr François Marion
is not entitled to any severance pay that is or may be owed in the event his position
is terminated or changed.
|
| Compensation for noncompetition clause |
No payment |
Mr François Marion is not subject to any non-competition
clause in connection with
his corporate office at Crédit Agricole CIB.
|
| Supplementary pension scheme |
No payment |
Mr François Marion benefits from a (closed) Crédit Agricole
CIB supplementary pension
scheme. The benefit of these commitments was authorised by the Board of Directors
of Crédit Agricole CIB on 2 November 2016 and was approved by the General Meeting
of 4 May 2018, in accordance with the procedure governing related-party agreements.
These commitments were once again authorised by the Board of Directors on 31 October
2018.
|
COMPENSATION ITEMS
OWED OR GRANTED IN RESPECT OF THE 2018 FINANCIAL YEAR TO MR Régis
Monfront, DEPUTY CHIEF EXECUTIVE OFFICER UNTIL 11 JULY 2018, SUBMITTED FOR SHAREHOLDER
APPROVAL
► Compensation
items owed or awarded during the term of office until 11 July 2018
subject to shareholder approval
|
|
Amounts in respect of corporate office
held until 11 July 2018 |
|
| Fixed compensation |
€200,075 |
Mr Régis Monfront received fixed compensation of €200,075
in respect of the corporate
office held at Crédit Agricole CIB until 11 July 2018. This compensation (€380,000
in annual basis) was set by the Board of Directors of Crédit Agricole CIB on 1 August
2013 on the proposal of the Compensation Committee and remained unchanged until the
end of his term of office.
|
| Annual variable compensation |
€170,000 |
At its meeting of 11 February 2019, the Crédit Agricole
CIB Board of Directors, on
the recommendation of the Compensation Committee on 5 February 2019, reviewed the
achievement of objectives and approved the amount of Mr Régis Monfront's variable
compensation in respect of his corporate office held until 11 July 2018, subject to
the approval of the Crédit Agricole CIB General Meeting of 7 May 2019. The target
achievement rate, 50% of which corresponds to quantifiable criteria and 50% to individual
criteria, was set at 99%. In light of the principles and criteria for determining,
distributing and granting elements of compensation approved by Crédit Agricole CIB's
General Meeting of 4 May 2018, the amount of variable compensation approved in respect
of the corporate office held by Mr Régis Monfront until 11 July 2018 consists of a
performance bonus of €162,000 and a Long-Term Incentive of €8,000, i.e. a total amount
of €170,000. The variable compensation may only be paid following the approval of
the General Meeting of Crédit Agricole CIB of 7 May 2019.
|
| Extraordinary compensation |
No payment |
In respect of the corporate office held at Crédit Agricole
CIB until 11 July 2018,
Mr Régis Monfront received no exceptional compensation.
|
| Share options, performance shares or any other long term
compensation element |
No payment |
In respect of the corporate office held at Crédit Agricole
CIB until 11 July 2018,
Mr Régis Monfront was not awarded any options or performance shares or any other kind
of long term compensation.
|
| Director's fees |
No payment |
Mr Régis Monfront did not receive any Directors' fees
from Crédit Agricole S.A. or
companies controlled by Crédit Agricole CIB in respect of his office held until 11
July 2018, as of 31 December 2018, within the meaning of Article L. 233-16 of the
French Commercial Code.
|
| Benefits in kind |
€3,624 |
The company paid a benefit in kind in the form of a car.
This benefit is treated as
an in-kind benefit for tax purposes in accordance with current regulations.
|
► Components of
compensation owed or awarded during the term of office until 11 July
2018 on which a General Meeting will vote or has voted in accordance with the procedure
governing related-party agreements and commitments
|
|
Amounts in respect of corporate office
held until 11 July 2018 |
Description |
| Severance payment |
No payment made |
In respect of the corporate office held at Crédit Agricole
CIB until 11 July 2018,
Mr Régis Monfront did not benefit from any severance payment that is or may be owed
in the event his position is terminated or changed.
|
| Compensation for noncompetition clause |
No payment made |
In respect of the corporate office held at Crédit Agricole
CIB until 11 July 2018,
Mr Régis Monfront was not subject to a non-compete clause.
|
| Supplementary pension scheme |
No payment |
In respect of the corporate office held at Crédit Agricole
CIB until 11 July 2018,
Mr Régis Monfront benefited from a Crédit Agricole CIB (closed) supplementary pension
scheme. The benefit of these commitments was authorised by the Board of Directors
of Crédit Agricole CIB at its meeting of 2 November 2016 and was approved by the General
Meeting of 4 May 2018, in accordance with the procedure governing related-party agreements.
|
COMPENSATION ITEMS
OWED OR GRANTED IN RESPECT OF THE 2018 FINANCIAL YEAR TO MR JACQUES
PROST, DEPUTY CHIEF EXECUTIVE OFFICER SINCE 17 JUNE 2018, SUBMITTED FOR SHAREHOLDER
APPROVAL
► Compensation
items owed or awarded during the term of office since 17 June 2018
subject to shareholder approval
|
|
Amounts or accounting valuation in
respect of the corporate office held until 17 June
2018
|
|
| Fixed compensation |
€207,142 |
Mr Jacques Prost received fixed gross compensation of
€207,142 in respect of the corporate
office held at Crédit Agricole CIB until 17 June 2018. This compensation (€450,000
in annual basis) was set by the Board of Directors of Crédit Agricole CIB on 9 May
2016 on the proposal of the Compensation Committee and remained unchanged until the
end of his term of office.
|
| Annual variable compensation |
€215,000 |
At its meeting of 11 February 2019, the Crédit Agricole
CIB Board of Directors, on
the recommendation of the Compensation Committee on 5 February 2019, reviewed the
achievement of objectives and approved the amount of Mr Jacques Prost's variable compensation
in respect of his corporate office held until 17 June 2018, subject to the approval
of the Crédit Agricole CIB General Meeting of 7 May 2019. The target achievement rate,
50% of which corresponds to quantifiable criteria and 50% to individual criteria,
was set at 112.5%. In light of the principles and criteria for determining, distributing
and granting elements of compensation approved by Crédit Agricole CIB's General Meeting
of 4 May 2018, the amount of variable compensation approved in respect of the corporate
office held by Mr Jacques Prost until 17 June 2018 consists of a performance bonus
of €185,000 (subject to the vesting conditions of the Crédit Agricole CIB regulations)
and a Long-Term Incentive of €30,000 (subject to the vesting conditions of the Crédit
Agricole S.A. regulations), i.e. a total amount of €215,000. The variable compensation
may only be paid following the approval of the General Meeting of Crédit Agricole
CIB of 7 May 2019.
|
| Extraordinary compensation |
No payment |
In respect of the corporate office held at Crédit Agricole
CIB until 17 June 2018,
Mr Jacques Prost received no exceptional compensation.
|
| Share options, performance shares or any other long term
compensation element |
No payment |
In respect of the corporate office held at Crédit Agricole
CIB until 17 June 2018,
Mr Jacques Prost was not awarded any options or performance shares or any other kind
of long term compensation.
|
| Director's fees |
No payment |
Mr Jacques Prost did not receive any Directors' fees
from Crédit Agricole S.A. or
from companies controlled by Crédit Agricole CIB as of 31 December 2018 within the
meaning of Article L. 233-16 of the French Commercial Code.
|
| Benefits in kind |
€3,627 |
The company paid a benefit in kind in the form of a car.
This benefit is treated as
an in-kind benefit for tax purposes in accordance with current regulations.
|
► Components of
compensation owed or awarded during the term of office since 17 June
2018 on which a General Meeting will vote or has voted in accordance with the procedure
governing related-party agreements and commitments
|
|
Amounts in respect of the corporate
office held until 17 June 2018 |
Description |
| Severance payment |
No payment made |
In respect of the corporate office held at Crédit Agricole
CIB until 17 June 2018,
Mr Jacques Prost did not benefit from any severance payment that is or may be owed
in the event his position is terminated or changed.
|
| Compensation for noncompetition clause |
No payment made |
In respect of the corporate office held at Crédit Agricole
CIB until 17 June 2018,
Mr Jacques Prost was not subject to a non-compete clause.
|
| Supplementary pension scheme |
No payment |
In respect of the corporate office held at Crédit Agricole
CIB until 17 June 2018,
Mr Jacques Prost benefited from a supplementary pension scheme for directors of Crédit
Agricole S.A., complementing the collective and obligatory pension and health schemes.
The benefit of these commitments was authorised by the Board of Directors of Crédit
Agricole CIB at its meeting of 2 November 2016 and was approved by the General Meeting
of 4 May 2018, in accordance with the procedure governing related-party agreements.
|
PRINCIPLES AND
CRITERIA FOR DETERMINING, DISTRIBUTING AND ALLOCATING THE FIXED, VARIABLE,
AND EXCEPTIONAL ITEMS CONSTITUTING THE TOTAL COMPENSATION AND BENEFITS OF ALL KINDS
DUE FOR THE 2019 FINANCIAL YEAR TO ALL EXECUTIVE CORPORATE OFFICERS OF THE COMPANY
IN RESPECT OF THEIR OFFICES, SUBJECT TO SHAREHOLDER APPROVAL
Pursuant to Law No 2016-1691 of 9 December 2016 on transparency, the fight against
corruption and the modernisation of the economy, the principles and criteria for determining,
distributing and allocating the fixed, variable and extraordinary elements constituting
the total compensation and benefits, of any nature, for the 2018 financial year for
all Executive Corporate Officers of the Company in respect of their corporate offices
(hereinafter the "items of compensation") must be submitted for approval by the shareholders.
The General Meeting to be held on 7 May 2019 will be asked to approve the principles
and criteria for determining, distributing and allocating the items constituting the
compensation due for the 2019 financial year for all Executive Corporate Officers
of Crédit Agricole CIB in respect of their corporate offices
| ― |
Mr Philippe Brassac;
|
| ― |
Mr Jacques Ripoll;
|
| ― |
Mr François Marion.
|
♦ Appointement
of a new executive corporate officer
For the appointment of a new Executive Corporate Officer, his or her compensation
will be determined by the Board of Directors in accordance with the principles and
criteria approved by the General Meeting, either in line with existing practices for
the fulfilment of functions of the same type, adapted as necessary if this person
exercises new duties, or a new office with no equivalent in respect of the preceding
period.
♦ Principles for
determining the items comprising the compensation of the chairman
of the board of the directors
The Board of Directors has decided to allocate the budget for Directors' fees as
follows:
a gross amount of €3,000 per meeting is allocated to each Board member for attending
meetings. An additional annual flat gross amount of €20,000 is allocated to the Chairman
of the Board.
Mr Philippe Brassac, Chairman of the Board of Directors, waived his right to Directors'
fees as of 20 May 2015 and for the duration of his term of office. Neither does he
receive from Crédit Agricole CIB any compensation or benefits of any nature whatsoever.
♦ Principles for
determining the items comprising the compensation of the Chief Executive
Officer
The elements of compensation for the Chief Executive Officer are determined by
the
Board of Directors, having consulted with and/or received proposals from the Compensation
Committee, in accordance with the principles set out by the Compensation Policy of
the Crédit Agricole CIB Group and with the applicable legal and regulatory provisions.
The office of the Chief Executive Officer has been executed without payment since
1 November 2018. Since that date, Mr Jacques Ripoll has not received any compensation
or benefits, of any kind whatsoever, from Crédit Agricole CIB.
♦ Principles for
determining the items comprising the compensation of the deputy chief
executive officers of Crédit Agricole CIB
The items of compensation for the Deputy Chief Executive Officers are determined
by
the Board of Directors, having consulted with and/or received proposals from the Compensation
Committee, in accordance with the principles set out by the Compensation Policy of
the Crédit Agricole CIB Group and with the applicable legal and regulatory provisions.
The amount of the annual fixed compensation of the Deputy Chief Executive Officers
is decided by the Board of Directors acting on a proposal of the Compensation Committee,
taking a number of factors into account:
| ― |
the scope of responsibilities of the Executive Corporate Officers;
|
| ― |
industry practices and the compensation packages for the same
or similar functions
in other major listed companies. Therefore, studies are conducted regularly, with
the assistance of specialist firms, to look into the positioning of the compensation
of the Company's Deputy Chief Executive Officers compared to other companies in the
financial sector in order to ensure the consistency of the principles and levels of
compensation.
|
The variable compensation policy applicable to Deputy Chief Executive Officers
falls
within the framework of the compensation policy for management at Crédit Agricole
S.A.. Pursuant to the principles set out in the compensation policy approved by the
Board of Directors in 2019, the Board of Directors defines the criteria for setting
the annual performance bonus of Deputy Chief Executive Officers and the targets to
be met.
It should be noted that the variable compensation granted to Executive Corporate
Officers
is subject to very strict rules as required by current banking regulations.
♦ Criteria and
conditions for granting items of variable compensation to deputy chief
executive officers
For each member of Executive Management, the annual performance bonus is based
50%
on quantifiable criteria and 50% on qualitative criteria, thereby combining recognition
of overall performance with a balance between financial and manage real performance.
At the recommendation of the Compensation Committee, the Board of Directors approves
the quantifiable and qualitative criteria proposed.
| ― |
The quantifiable criteria are based on implementation of the
Net Banking Income budget,
Cost Control budget, Net Income Group share budget and the Risk Weighted Assets budget,
within the scope of Crédit Agricole CIB (CIB) and that of the consolidated Crédit
Agricole S.A. Group. They are the same for all Deputy Chief Executive Officers.
|
| ― |
The qualitative criteria are set individually and allow grading
of:
| ― |
societal value creation: measures social responsibility, respect
for values above
and beyond statutory obligations, impact on the environment, relationship with partners,
ethics, etc.;
|
| ― |
value creation for internal or external clients: measures satisfaction
with services
delivered and advice given;
|
| ― |
managerial value creation: measures the capacity to attract,
develop and retain employees.
|
|
The performance bonus may reach the target level in the event of achieving all
the
financial and nonfinancial objectives and may reach the maximum level in the event
of exceptional performance. The target and maximum levels are expressed as a percentage
of the fixed salary and are defined by the Board of Directors for each member of Crédit
Agricole CIB's Executive Management.
Jacques Prost François Marion A Long-Term Incentive can be added to this bonus
for
Executive Managers of the Crédit Agricole S.A. Group, in order to encourage sustainable
performance beyond the financial results and strengthen its relationship with compensation,
with a special focus on the impact on society. It is awarded following managerial
assessment and is an integral part of the variable compensation subject to the approval
of the Board of Directors. The payment of elements of variable and extraordinary compensation
to the Deputy Chief Executive Officers in respect of the current financial year (2019)
is, in any event, subject to the approval of the Ordinary General Meeting that will
take place in 2020, of all the elements of compensation for each Deputy Chief Executive
Officer in question.
ALLOCATION AND
DISTRIBUTION CRITERIA FOR ITEMS OF COMPENSATION OF THE DEPUTY CHIEF
EXECUTIVE OFFICERS
|
|
Description |
|
|
| Fixed compensation |
The amount of the annual fixed compensation of the Deputy
Chief Executive Officers
takes into consideration:
|
|
|
|
|
■ the scope of responsibility; |
|
|
|
|
■ industry practices and the compensation packages for
the same or similar functions
in other major listed companies. With the assistance of specialist firms, studies
are conducted regularly to look into the positioning of the compensation of the Company's
Executive Corporate Officers compared to other companies in the financial sector in
order to ensure the consistency of the compensation principles and levels.
|
|
|
|
|
It is envisaged that the fixed compensation of the Deputy
Chief Executive Officers
will only be reviewed on a relatively long-term basis, unless a change of the supervisory
scope of the role justifies a review. There are no plans to change the fixed compensation
in 2019.
|
|
|
|
|
For information purposes, the date of the last review
of the fixed compensation was: |
|
|
|
|
|
Last revision date |
|
|
|
François Marion |
9 May 2016 |
|
| Variable compensation |
For each Deputy Chief Executive Officer, the annual performance
bonus is based 50%
on quantifiable criteria and 50% on qualitative criteria.
|
|
|
|
|
The quantifiable criteria set by the Board of Directors
at its meeting of 11 February
2019, are the following: Implementation of the Net Banking Income budget, Cost Control
budget, Net Income, Group share budget and the Risk Weighted Assets budget, within
the scope of Crédit Agricole CIB (CIB) and that of the consolidated Crédit Agricole
S.A. scope. They are the same for all Deputy Chief Executive Officers.
|
|
|
|
|
The qualitative criteria are set individually for each
Deputy Chief Executive Officer
and allow grading of:
|
|
|
|
|
■ societal value creation: measures social responsibility,
respect for values above
and beyond statutory obligations, impact on the environment, relationship with partners,
ethics, etc.;
|
|
|
|
|
■ value creation for internal or external clients: measures
satisfaction with services
delivered and advice given;
|
|
|
|
|
■ managerial value creation: measures the capacity to
attract, develop and retain
employees.
|
|
|
|
|
The performance bonus may reach the target level in the
event of achieving all the
financial and nonfinancial objectives and may reach the maximum level in the event
of exceptional performance. The targets and caps, based on the fixed compensation,
are as follows:
|
|
|
|
|
|
Target |
Cap |
|
|
François Marion |
80% |
130% |
|
|
A Long-Term Incentive can be added to this bonus for
Executive Managers of the Crédit
Agricole S.A. Group, in order to encourage sustainable performance beyond the financial
results and strengthen its relationship with compensation, with a special focus on
the impact on society. It is awarded following managerial assessment and is an integral
part of the variable compensation subject to the approval of the General Meeting.
|
|
|
| Annual variable compensation |
The Deputy Chief Executive Officers do not benefit from
a multi-annual variable compensation
system for the 2019 financial year.
|
|
|
| Extraordinary compensation |
There are currently no plans to grant the Deputy Chief
Executive Officers any extraordinary
compensation in connection with the 2019 financial year.
|
|
|
| Stock options, performance shares or any other long-term
compensation |
The Deputy Chief Executive Officers do not benefit from
stock option plans or performance
shares for the 2019 financial year.
|
|
|
| Director's fees |
The Deputy Chief Executive Officers do not receive Directors'
fees from Crédit Agricole
S.A. or other companies controlled by Crédit Agricole CIB in respect of 2019 financial
year within the meaning of Article L 233-16 of the French Commercial Code.
|
|
|
| Benefits in kind |
The Deputy Chief Executive Officers enjoy the use of
a company car. This benefit is
treated as an inkind benefit for tax purposes in accordance with current regulations.
|
|
|
| Supplementary pension scheme |
As part of the commitments authorised by the Board of
Directors and approved by the
General Meeting, the Deputy Chief Executive Officers may benefit from a supplementary
pension scheme, supplementary to the collective and mandatory pension and health plans.
Otherwise, that will be the subject of the regulated conventions procedure.
|
|
|
|
|
François Marion |
Eligible for supplementary pension of Crédit Agricole
CIB |
|
| Severance payments |
The Deputy Chief Executive Officers, with respect to
their terms of office, do not
benefit from severance payments that are or may be due upon termination or a change
in office; Otherwise, that will be the subject of the regulated conventions procedure.
|
|
|
| Non-compensation clause |
The Deputy Chief Executive Officers do not benefit from
compensation pursuant to a
non-competition clause in respect of their corporate offices. Otherwise, that will
be the subject of the regulated conventions procedure.
|
|
|
1.4.6 Directors'
fees and other compensation paid to members of the Board of Directors
of Crédit Agricole CIB
DIRECTORS' FEES
IN 2018
The amounts of the Directors' fees received by the members of the Company's Board
of Directors in connection with the offices they held in 2018 with Crédit Agricole
Corporate and Investment Bank are shown below.
The amounts of the Directors' fees paid by Crédit Agricole S.A. to the Directors
in
connection with their offices in said company are also provided.
| In euros |
Jetons de présence(1)
verses par Crédit Agricole CIB
|
Rappel des jetons de présence versés
par Crédit Agricole ClB en 2017 |
Jetons de présence verses par Crédit
Agricole S.A. |
Total 2018 |
| Philippe BRASSAC (4) |
|
|
|
|
| Jean de Dieu BATINA |
17,850 |
1,905 |
|
17,850 |
| Jacques BOYER (6) |
19,740 |
|
|
19,740 |
| Audrey CONTAUT (2) |
14,904 |
2,535 |
|
14,904 |
| Bertrand CORBEAU (4) |
|
|
|
|
| Marie-Claire DAVEU |
55,020 |
27,840 |
|
55,020 |
| Claire DORLAND CLAUZEL |
34,860 |
19,473 |
|
34,860 |
| Olivier GAVALDA (6) |
10,500 |
|
|
10,500 |
| Nicole GOURMELON |
28,560 |
19,050 |
|
28,560 |
| Françoise GRI |
28,770 |
13,335 |
94,850 |
123,620 |
| François IMBAULT (7) |
6,300 |
12,912 |
|
6,300 |
| Luc JEANNEAU |
16,800 |
7,620 |
|
16,800 |
| Anne-Laure NOAT |
47,950 |
29,210 |
|
47,950 |
| Jean-Pierre PAVIET (7) |
15,750 |
28,575 |
11,200 |
26,950 |
| Catherine POURRE(3) |
44,472 |
27,300 |
79,526 |
123,998 |
| François THIBAULT |
23,940 |
9,525 |
54,461 |
78,401 |
| Odet TRIQUET (6) |
8,400 |
|
|
8,400 |
| Jean Pierre VAUZANGES |
28,770 |
19,050 |
|
28,770 |
| Paul CARITE (5) |
8,400 |
|
|
8,400 |
| Jacques DUCERF |
12,600 |
9,525 |
|
12,600 |
(1)
After deductions from amounts owed to individual beneficiaries resident in France:
income tax prepayment (12.8%) and social contributions (17.20%).
(2)
Ms. Contaut did not receive her attendance fees, which were paid to her union organisation.
(3)
After deduction from the amounts due under applicable provisions in the country of
residence.
(4)
Mr Brassac has waived his Directors' fees since 20 May 2015.Mr. Corbeau waived his
Directors' fees for the duration of his term of office.
(5)
Non-voting Director since 21 March 2018.
(6)
Director since 4 May 2018.
(7)
Director until 4 May 2018.
In 2018, Mr Bertrand Corbeau, Director, was an employee of Crédit Agricole S.A.
The
remuneration paid to him in 2018, it being specified that he did not receive any remuneration
from Crédit Agricole CIB, amounted to €814,042 (including fixed compensation of €480,000,
variable compensation of €314,241 and benefits in kind of €19,801).
TOTAL BUDGET FOR
DIRECTORS' FEES IN 2018
The Ordinary General Meeting of Shareholders of Crédit Agricole Corporate and Investment
Bank set a maximum total annual budget of €700,000 for Directors' fees.
RULES GOVERNING
THE DISTRIBUTION OF DIRECTORS' FEES IN 2018
The distribution process of the Directors' fees is mainly based on the compensation
of the effective participation in meetings and on the required availability for certain
missions.
♦ Meetings of
the Board of Directors
A gross amount of €3,000 per meeting is allocated to each Board member for attending
meetings. An additional annual flat gross amount of €20,000 is allocated to the Chairman
of the Board. Non-voting Directors receive the same compensation as Directors which
is paid out of the overall budget.
♦ Meetings of
the Board of Directors specialised Committees
The rules on the distribution of Directors' fees that were in force during 2018
are
described in the table below.
|
|
Chairman |
Member |
| Committee Compensation |
Annual flat amount: €6,000 |
Annual flat amount: €4,500 |
| Committee Appointments and Governance Committee |
Annual flat amount: €4,500 |
Annual flat amount: €4,500 |
| Audit Committee |
Annual flat amount: €25,000 |
€3,300 per meeting with an annual cap of €23,500 |
| Risk Committee |
Annual flat amount: €30,000 |
€3,300 per meeting with an annual cap of €23,500 |
1.5 SUMMARY TABLE
OF THE RECOMMENDATIONS OF THE AFEP-MEDEF CODE REVISED IN JUNE 2018
WHICH WERE NOT FOLLOWED AND THUS EXCLUDED
At 31 December
2018
Background:
| ― |
the Company is more than 99%-owned by the Crédit Agricole Group
(Crédit Agricole S.A.
owns more than 97% of the Company's shares);
|
| ― |
the Company's governance is therefore in line with that of the
Crédit Agricole Group.
|
| ― |
The composition of the Board and its committees reflects the
corporate governance
system, under which Board positions in certain Group subsidiaries are assigned to
the Chairmen or Chief Executive Officers of regional branches of the Crédit Agricole
Group.
|
| AFEP-MEDEF Code recommendations |
Comments |
| 10. Board meetings and Committee meetings 10.3 It is
recommended that a meeting be
organised every year without the presence of the Executive Management members.
|
The compensation, objectives and performance of the Deputy
Chief Executive Officers
are reviewed and discussed by the Compensation Committee at meetings which these Executive
Management members do not attend. In addition, the presentation of the Compensation
Committee's conclusions to the Board of Directors and the Board's deliberations thereon
are made without the presence of the Deputy Chief Executive Officers, which is permit
for the Board to discuss the way in which the Executive Management members perform
their duties. It is recalled that the mandate of Chief Executive Officer within Crédit
Agricole CIB is an honorary appointment.
|
| 19. Each director must personally own a minimum number
of shares, relative to the
amount of attendance fees allocated.
|
Article 10 of the Company's Articles of Association provides
that directors appointed
by the General Meeting must hold one share in the company.
|
| 21. Termination of the employment contract if an employee
becomes a Corporate Officer
21.1 It is recommended that when an employee becomes an executive officer of the Company,
the employment contract binding the employee to the company or to a company in the
Group be suspended either by conventional termination or by resignation. 21.2 This
recommendation applies to the Chairman, the Chief Executive Officer, and the Chief
Executive Officers in companies with a Board of Directors.
|
Mr Jacques Ripoll is a member of the Executive Committee
and the Deputy General Manager
of Crédit Agricole S.A., in charge of the Large Customer segment. As such, he manages
the Bank's corporate and investment activities and oversees the wealth management
activities and services for institutional investors and businesses. It is in this
context that he has an employment contract with Crédit Agricole S.A. which was renewed.
|
| 22. Obligation to share ownership by Executive Corporate
Officers The Board of Directors
sets a minimum amount of shares that Corporate Officers must keep in registered form
until they relinquish their appointments. This decision will be reviewed at least
with each renewal of their mandate.
|
The Company's shares are not offered to the public and
are not listed for trading
on a regulated market. More than 99% of the capital is also held by the Crédit Agricole
Group. Neither the Chairman of the Board, the Chief Executive Officer or the Deputy
Chief Executive Officer holds any shares in the Company.
|
1.6 PROCEDURES
FOR SHAREHOLDER PARTICIPATION IN GENERAL SHAREHOLDER MEETINGS
The procedures for participating in Shareholders' Meetings are set out in section
V of the Company's Articles of Association. The composition and operating procedures,
as well as the principal powers of the General Meeting, the description of the shareholders'
rights and the procedures for exercising these rights are detailed in its "Art.19
- Composition - Nature of Meetings", "Art. 20 - Meetings", "Art. 21. - Ordinary General
Meeting" and "Art. 22 - Extraordinary General Meeting".
"SECTION V - GENERAL
MEETINGS"
ART. 19 - COMPOSITION
- NATURE OF MEETINGS
Shareholders' Meetings may be attended by all shareholders, regardless of the number
of shares they own.
Duly constituted Shareholders' Meetings represent all shareholders. Decisions taken
in Shareholders' Meetings in accordance with laws and regulations in force are binding
on all shareholders. A Shareholders' Meeting is deemed extraordinary if any decisions
relate to a change in the Articles of Association. All other meetings are deemed ordinary.
Special Shareholders' Meetings convene holders of a particular category of shares,
if any such category exists, to make decisions about any changes in the rights of
such shares.
These Special Shareholders' Meetings are convened and take decisions according
to
the same conditions as Extraordinary General Meetings.
ART. 20 - MEETINGS
Shareholders' Meetings will be convened and deliberate in accordance with the applicable
laws and regulations.
Meetings take place at the head office or in any other location specified in the
notice
of meeting.
The Shareholders' Meeting is chaired by the Chairman of the Board of Directors
or,
in his absence, by a Vice-Chairman of the Board of Directors or by a Director designated
by the Chairman of the Board of Directors for this purpose. If no such person is available,
the persons present shall themselves elect a chairman for the meeting. The agenda
shall be determined by the person convening the meeting. The agenda shall only contain
proposals made by the person convening the meeting or by shareholders.
Each member of the Ordinary or Extraordinary General Meeting will have a number
of
votes proportional to the portion of the share capital corresponding to the shares
that he or she owns or represents, provided that those shares are not deprived of
voting rights. The Board of Directors may decide to treat as present, for the purpose
of calculating the quorum and majority, shareholders taking part in the meeting by
videoconferencing or a telecommunication medium that enables them to be identified,
the type and terms of use of which are compliant with the regulations in force.
ART. 21 ORDINARY
GENERAL MEETING
The Ordinary General Meeting takes decisions according to the quorum and majority
conditions determined by the laws and regulations in force.
Shareholders are invited to attend an Ordinary General Meeting every year.
The Annual Ordinary General Meeting takes note of the reports by the Board of Directors
and the Statutory Auditors.
It discusses, approves or adjusts the parent-company financial statements and,
if
applicable, the consolidated financial statements, and determines the appropriation
of income for the year.
It appoints the Statutory Auditors.
It discusses all other proposals on the agenda that do not fall under the remit
of
the Extraordinary General Meeting.
Other ordinary general meetings may exceptionally be held in addition to the Annual
Ordinary General Meeting.
ART. 22 - EXTRAORDINARY
GENERAL MEETING
The Extraordinary General Meeting takes decisions according to the quorum and majority
conditions determined by the laws and regulations in force.
The Extraordinary General Meeting may make any changes to the Articles of Association.
1.7 CAPITAL STRUCTURE
OF THE COMPANY AND OTHER INFORMATION UNDER L.225-37-5 OF THE
FRENCH COMMERCIAL CODE
Capital structure
At 31 December 2018, the Company's share capital consisted of 290,801,346 ordinary
shares with a par value of €27 each, giving a share capital of €7,851,636,342. The
shares are more than 97%-owned by Crédit Agricole S.A. and more than 99%-owned by
the Crédit Agricole Group. The Company's shares have not been offered to the public
and are not listed for trading on a regulated market. There is no employee shareholding
scheme in the Company nor a holder of securities with special control rights or vote
rights.
To the Company's knowledge, there are no shareholder agreements that may result
in
restrictions on the transfer of shares and the exercise of voting rights.
There is no agreement regarding allowances for Board of Director's members and
employees
in case of resignation or dismissal without real and serious cause or in case of job
termination in a context of a public offering to buy or a public offering to exchange.
The Board of Directors' powers are described in section 1.2.2. The conditions for
transferring Company shares and the rules relating to the appointment and to the replacement
of Board members result from the provisions of the Articles of Association as explained
below. Any change in the Article of Associations is under the authority of the Ordinary
General Meeting (Article 22 of the Article of Associations, as reminded in section
1.6).
Extracts from
the Company's Articles of Association
.../... ART.
ART. 7 - FORM OF SHARES - TRANSFER AND TRANSMISSION OF SHARES
7a. Form of shares
The shares must be registered in a pure nominative account with the issuing company.
7b. Transfer and
assignment of shares
I. Transfers of shares for the benefit of spouses, ascendants and descendants are
free.
I. The same applies to transfers to a person appointed Director, within the limit
of the number of shares required for the exercise of his function, as well as transfers
in favour of Crédit Agricole S.A. and any company under its control, within the meaning
of Article L. 233-3 I & II of the French Commercial Code.
II. Except in the cases referred to in I. above, no natural or legal person ("the
transferee") may become a shareholder of the Company or the holder of a dismembered
right in respect of any share or right arising therefrom, in any manner ("the transfer"),
if it has not been previously approved by the Chairman of the Board of Directors,
under the conditions set out below:
1. The request for approval of the transferee is notified to the Company by an
extrajudicial
act or by registered letter with acknowledgement of receipt, indicating the transferee's
surname, first names and address, the number of shares that are planned to be assigned,
as well as the price offered and the conditions of the sale. Approval is granted either
by way of a notification, or through the failure to reply within three months of the
request. The approval decision is made by the Chairman. No justification will be given
for the decision, and refusals may never give rise to a legal claim.
The transferor is informed of the decision, within fifteen days of receipt of the
notification, by registered letter with acknowledgement of receipt.
In case of refusal, the transferor will have ten days from receipt to make known,
using the same means, whether he waives his proposed transfer or not.
2. In the event that the transferor does not waive his proposed transfer, the Chairman
is obliged, within three months from the notification of the refusal, to have the
shares acquired, either by shareholders or by third parties or, with the consent of
the transferor, by the Company for the purpose of reducing the capital.
For this purpose, the Chairman will notify the shareholders of the proposed sale,
by registered letter, inviting each to indicate the number of shares he or she wants
to acquire.
The purchase offers are sent by the shareholders to the Chairman, by registered
letter
with acknowledgement of receipt, within ten days of the notification they have received.
The distribution between the shareholders purchasing the offered shares is made by
the Chairman, in proportion to their participation in the capital and within the limit
of their requests.
3. If no request for purchase is sent to the Chairman within the above time limit,
or if the requests do not concern all of the shares, the Chairman may have the available
shares purchased by third parties.
4. With the transferor's approval, the shares may also be purchased by the Company.
The Chairman requests this approval by registered letter with acknowledgement of receipt
to which the transferor must respond within ten days following its receipt.
If the transferor approves, on the proposal of the Chairman, the Board of Directors
convenes an Extraordinary General Meeting of Shareholders to decide on the repurchase
of the shares by the Company and the corresponding reduction of the share capital.
This notice must be given early enough to respect the three-month period below.
In all cases of purchase or repurchase mentioned above, the price of the shares
is
set as indicated in paragraph 6 below.
5. If all of the shares are not purchased or repurchased within three months from
the notification of the refusal of approval, the transferor may realize the sale for
the benefit of the original transferee, for all the shares sold, notwithstanding any
partial purchase offers that may have been made. This time limit of three months may
be extended by order of the President of the Commercial Court, without appeal, at
the request of the Company, the transferor shareholder and the transferee, duly summoned.
6. In the event that the shares offered are purchased by shareholders or third
parties,
the Chairman shall notify the transferor of the surname, first names and domicile
of the purchaser(s).
Failing agreement between the parties, the price of the shares shall be determined
under the conditions provided for in Article 1843-4 of the French Civil Code.
Fees for experts shall be shared equally between the buyer and the seller.
7. Within eight days of the determination of the price, a notice is sent to the
transferor,
by registered letter with acknowledgement of receipt, requesting that he make known,
within fifteen days of receipt of said notice, whether he waives the transfer or,
if not, informs him to proceed to the registered office to pay this price, which is
not interest-bearing, and sign the movement order. If the transferor does not appear
within the fifteen-day period referred to above, or does not notify the Company within
this period of his renunciation, the transfer on behalf of the purchaser(s) takes
place automatically following the order from the Chairman of the Board of Directors
or a specially mandated person, with effect from the date of this transfer.
8. The provisions of this article generally apply to any means of ownership transfer,
whether free of charge, for value, over-the counter or otherwise, even if the transfer
takes place via public tender by virtue of a judicial, private, voluntary or forced
decision. They are applicable in the event of incorporation, partial asset transfer,
merger or demerger or transfer of all assets.
9. The approval clause, which is the subject of this article, also applies to the
transfer of the allocation rights in the event of a capital increase by incorporation
of reserves, profits or share premiums. It also applies in the event of transfer of
the subscription right to a capital increase in cash or an individual waiver of the
subscription right in favour of persons named.
In either case, the right of approval and the repurchase conditions stipulated
in
this article apply to the subscribed shares, and the time limit given to the Chairman
to notify the third-party subscriber whether or not he accepts it as shareholder is
three months from the date of final completion of the capital increase.
In case of repurchase, the price of the shares shall be determined under the conditions
provided for in Article 1843-4 of the French Civil Code.
10. In case of allocation of Company shares, following the division of a company
owning
these shares, allocations to persons who are not already shareholders shall be subject
to the approval set down in this article.
Consequently, any planned attribution to persons other than shareholders must be
the
object of a request for approval by the liquidator of the company under the conditions
set out in paragraph 1 above. In the absence of notification to the liquidator of
the Chairman's decision, within three months of the request for approval, this approval
shall be considered acquired.
In case of refusal to approve certain beneficiaries, the liquidator may, within
thirty
days of the notification of the refusal of approval, modify the attributions in such
a way as to present only approved beneficiaries.
In the event that no beneficiary is approved, as in the case where the liquidator
has not modified his sharing project within the above time limit, the shares allocated
to the nonapproved shareholders must be bought or repurchased from the company in
liquidation, under the conditions set out under paragraphs 2 to 4 above. In the absence
of purchase or repurchase of all shares, the object of the refusal of approval, within
the time limit set down in paragraph 5 above, the sharing can be realized according
to the presented project.
III. Transfers of shares by succession or in case of liquidation of community of
property
between spouses are free.
ART. 8 - RIGHTS
AND OBLIGATIONS RELATED TO SHARES
Each share entitles the holder thereof to a proportionate ownership right in the
assets
of the Company and in the proceeds after liquidation equal to the pro rata portion
of the registered capital represented by such share, taking into account, if applicable,
the amortised and unamortised capital, or the paid up and unpaid capital, of the nominal
amount of the shares and the rights of the shares of different categories.
All shares which represent or will represent part of the share capital will be
included
as share capital for tax purposes. Thus, all duties and taxes which, for whatever
reason, may become payable by certain holders upon distribution of capital, either
during the existence of the Company or at liquidation, will be allocated among all
shares representing capital at the time of such distribution or distributions, with
the result that, after taking into account the unredeemed nominal value of the shares
to the extent of their respective rights, all present or future shares will confer
upon the holders thereof the same effective benefits and the right to receive the
same net amounts.
3 Whenever it is necessary to possess a certain number of shares in order to exercise
a right, the isolated securities or those less than the required amount do not confer
any rights against the Company; it shall be up to holders that do not possess such
number to group together and, if necessary, to purchase or sell the requisite number
of securities.
ART 9. - COMPOSITION
OF THE BOARD OF DIRECTORS
The Company is administered by a Board of Directors composed of six to twenty Directors:
at least six appointed by the General Meeting of Shareholders in accordance with the
provisions of Article L. 225-18 of the French Commercial Code or any subsequent text
and two elected by the employees in accordance with the provisions of Articles L.
225-27 to L. 225-34 of the French Commercial Code or any subsequent text.
The following individuals may also attend meetings of the Board of Directors in
an
advisory capacity:
where applicable, the non-voting Director(s) appointed in accordance with Article
17 below;
one member of the Works Council designated by the said council.
1. Directors appointed
by the General Meeting of Shareholders
These Directors are appointed, renewed and dismissed under the legal and regulatory
conditions in force.
Their term of office is three years. However, the Director appointed to replace
another
whose term of office has not expired shall remain in office only for the remainder
of his predecessor's term of office. In the event of the vacancy of one or more directorships
as a result of death, resignation, or other cases provided for by law, replacement
by co-optation shall take place under the conditions provided for by the regulations
and legislation in force.
2. Directors elected
by the employees
Their number is fixed at two: one is elected by managerial and similar employees;
the other by the other employees.
In any case, their number may not exceed one third of the Directors appointed by
the
General Meeting.
They are elected under the terms and conditions set by the legal and regulatory
provisions
in force or, failing this, by the Chief Executive Officer after consulting with the
Company's representative unions. These two Directors are elected for a period expiring
on the same day:
| ― |
either at the end of the Annual General Meeting of Shareholders
held for the third
calendar year following that of their election;
|
| ― |
or at the end of the electoral process organized during this
third calendar year if
this process is carried out after the Meeting.
|
In the event of a vacancy due to death, resignation, revocation or termination
of
the employment contract of a Director elected by the employees, the vacant seat is
filled in accordance with the legal and regulatory provisions and his substitute takes
office immediately. In the absence of a substitute capable of performing the duties,
a new election shall be held within three months.
In any case, the duration for which a Director elected by the employees is appointed
is limited to the period remaining until the date on which his employment contract
terminates.
ART. 10 - OTHER
REQUIREMENTS RELATED TO THE DIRECTORS
During his term of office, each Director appointed by the General Meeting of Shareholders
must own at least one share.
Any Director reaching the age of sixty-five is deemed to have retired from office
at the end of the Annual General Meeting that follows the date of the birthday in
question.
However, the term of office of a Director appointed by the General Meeting of Shareholders
may be renewed for a maximum of five subsequent one-year periods, provided the total
number of Directors aged 65 or over does not exceed at any time one third of the total
number of Directors in office. If the number of Directors is not exactly divisible
by three, the third is calculated by rounding up.
ART. 15 - CHAIRMAN
OF THE BOARD OF DIRECTORS
The Board of Directors elects a Chairman from among its members, whose term of
office
it determines, without exceeding the duration of his term as Director.
The Board of Directors may elect one or multiple Deputy Chairmen from among its
members,
whose term of office it also determines, without exceeding the duration of their terms
as Directors.
He organizes and guides the work of this body, about which he reports to the General
Meeting. He sees to the proper functioning of the Company's corporate bodies and ensures,
in particular, that the Directors are able to fulfil their mission.
In general, the Chairman is vested with all the powers attributed to him by the
legislation
in force.
By way of derogation from the provisions of Article 10, paragraph 2, of these Articles
of Association, the age limit for the exercise of the functions of Chairman of the
Board of Directors is set at 67 years, except in the case where the Chairman also
assumes the functions of the Company's Chief Executive Officer.
He benefits from the provisions of Article 10, paragraph 3.
1.8 INFORMATION
ON THE DELEGATIONS CONCERNING CAPITAL INCREASES
At 31 December 2018, no delegation has been granted by the General Meeting to the
Board of Directors regarding capital increases.
The Board of Directors
2. COMPOSITION
OF THE EXECUTIVE COMMITTEE
THE COMPOSITION
OF CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK'S EXECUTIVE COMMITTEE
AT 31 DECEMBER 2018 WAS AS FOLLOWS:
| ■ Jacques RIPOLL |
Chief Executive Officer |
| ■ François MARION |
Deputy Chief Executive Officer |
| ■ Jean-François BALAŸ |
Deputy General Manager |
| ■ Isabelle GIROLAMI |
Deputy General Manager |
| ■ Régis Monfront |
Deputy General Manager |
| ■ Alexandra BOLESLAWSKI |
Risk & Permanent Control |
| ■ Olivier BELORGEY |
Finance |
| ■ Martine BOUTINET |
Human Resources |
| ■ Éric CHEVRE |
Global Compliance |
| ■ Hélène COMBE-GUILLEMET |
Global Investment Banking |
| ■ Frédéric COUDREAU |
Global IT |
| ■ Bertrand HUGONET |
Corporate Secretary & Communication |
| ■ Éric LECHAUDEL |
Operations & Country COOs |
| ■ Jamie MABILAT |
Debt Optimisation & Distribution |
| ■ Jacques de VILLAINES |
Structured Finance |
SINCE 11 FEBRUARY
2019, AS A RESULT OF CHANGES IN GOVERNANCE, EXECUTIVE COMMITTEE
AND MANAGEMENT COMMITTEE ARE CONSTITUTED AS FOLLOWS:
♦ Executive Committee
| ■ Jacques RIPOLL |
Chief Executive Officer |
| ■ François MARION |
Deputy Chief Executive Officer |
| ■ Jean-François BALAŸ |
Deputy General Manager |
| ■ Isabelle GIROLAMI |
Deputy General Manager |
| ■ Olivier BELORGEY |
Finance |
| ■ Didier GAFFINEL |
Global Coverage and Investment Banking |
| ■ Alexandra BOLESLAWSKI |
Risk & Permanent Control |
THE MANAGEMENT
COMMITTEE IS COMPOSED OF THE EXECUTIVE MANAGEMENT AND ALSO INCLUDES:
♦ Management Committee
| ■ Régis Monfront |
Senior Coverage & Investment Banking officer |
| ■ Marc-André POIRIER |
SRO Amériques |
| ■ Michel ROY |
SRO Asie-Pacifique |
| ■ Thierry SIMON |
SRO Moyen-Orient - Afrique |
| ■ Frank SCHÖNHERR |
SCO Allemagne |
| ■ Ivana BONNET |
SCO Italie |
| ■ Daniel PUYO |
SCO UK |
| ■ Bertrand HUGONET |
Corporate Secretary & Communication |
| ■ Jamie MABILAT |
Debt Optimisation & Distribution |
| ■ Julian HARRIS |
Debt restructuring & Advisory Services |
| ■ Eric CHEVRE |
Global Compliance |
| ■ Hélène COMBE-GUILLEMET |
Global Investment Banking |
| ■ Frédéric COUDREAU |
Global IT |
| ■ Pierre GAY |
Global Markets Division |
| ■ Martine BOUTINET |
Human Resources |
| ■ Arnaud CHUPIN |
Inspection Générale |
| ■ Laurent CHENAIN |
International Trade & Transaction Banking |
| ■ Bruno FONTAINE |
Legal |
| ■ Eric LECHAUDEL |
Operations & Country COOs |
| ■ Jacques de VILLAINES |
Structured Finance |
4. 2018 BUSINESS
REVIEW AND FINANCIAL INFORMATION
| 5.3 B€ NET BANKING INCOME |
N° 1 WORLDWIDE ON SUPRANATIONAL BONDS ISSUES (1) |
(1)
As bookrunner, worldwide end of 2018. Source: Renitiv N5.
| N° 4 WORLDWIDE IN PROJECT FINANING (1) |
122.8 B€ ASSETS UNDER MANAGEMENT (WEALTH MANAGEMENT) |
(1)
As mandated arranger by volume in 2018. Source: Refinitiv X02.
WEALTH MANAGEMENT
UNDERLYING (1)
NBI BY BUSINESS LINE IN 2018
IN € MILLION
(1)
Restated from loan hedges and DVA running impact.
1. CRÉDIT AGRICOLE
CIB GROUP'S BUSINESS REVIEW AND FINANCIAL INFORMATION
1.1 PRESENTATION
OF CRÉDIT AGRICOLE CIB GROUP'S FINANCIAL STATEMENTS
Changes to accounting
policies
Pursuant to EC Regulation 1606/2002, the consolidated financial statements were
prepared
in accordance with IAS/IFRS standards and IFRIC interpretations applicable at 31 December
2018 as adopted by the European Union (the carve-out version) and using certain dispensations
of IAS 39 as regards macro-hedge accounting.
The standards and interpretations are identical to those used and described in
the
Group financial statements at 31 December 2017. They have been supplemented by the
provisions of those IFRS as endorsed by the European Union at 31 December 2018 and
that must be applied in 2018 for the first time.
Changes in consolidation
scope
Changes in scope between 1 January and 31 December 2018 were as follows:
COMPANIES FIRST-TIME
CONSOLIDATED IN 2018
The following company entered the scope of consolidation:
| ― |
Banca Leonardo S.p.A.
|
| ― |
CFM Indosuez Conseil en Investissement
|
| ― |
CFM Indosuez Gestion
|
| ― |
CFM Indosuez Conseil en Investissement, Succursale
|
| ― |
de Noumea
|
| ― |
Azqore
|
| ― |
Azqore Singapore Branch SA
|
| ― |
Crédit Agricole CIB Transactions
|
| ― |
FCT La Route Avance
|
COMPANIES DECONSOLIDATED
IN 2018
The following companies went out of the scope of consolidation:
1.2 ECONOMIC AND
FINANCIAL ENVIRONMENT
Overview of 2018
Despite tighter monetary and financial conditions in the US, the latter's protectionist
approach to trade, a highly volatile oil price (which registered an increase on average
over the year 1) and political and geopolitical tensions, the global economy
continued to progress
at a steady pace. This dynamic trend did not give rise to imbalances (inflation and
external deficits) usually fuelled by strong growth and which traditionally signal
an imminent downturn. Price formation (previously the close link between falling unemployment
and rising wages) was transformed by structural factors (expansion of the tertiary
sector, "uberisation" of the economy, increased competition), hence inflation remained
low. The depth of the 2008 financial crisis was also a factor hindering the development
of patent imbalances, notably in the form of inflation. However, the synchronous acceleration
of growth in the major zones disappeared. Growth in the US remained strong, but there
were signs of a gradual weakening in the Eurozone, and further still in emerging countries.
The United States continued to register a steady pace of high economic growth (2.8%
after 2.2% in 2017) driven by household consumption, the recovery, albeit disappointing,
in investment, and "over-stimulation" by a substantial but equally untimely budget
plan. Fiscal stimulus measures added +0.8 percentage points of growth in 2018 (with
estimated additional growth in 2019 of +0.6 percentage points). Bolstered by tax savings
at a time when the economy operated at full capacity, the cycle, although mature,
had yet to peak. The current cycle, which started in June 2009, has already seen 114
consecutive months of growth, versus records of 106 months and 119 months in the early
1960s and 1990s respectively. Although growth surpassed its potential rate (2%) and
unemployment (3.7% versus a peak of 10% in October 2009) fell below the equilibrium
level (according to the Federal Reserve, at a rate of 4.5% the economy is at full
employment), headline inflation did not rise significantly (annual average of 2.4%
after 2.1% in 2017). The Federal Reserve continued its cycle of monetary tightening.
It introduced four 25bp rate hikes in its policy rate, bringing it to 2.50% at the
end of 2018. Since the start of monetary tightening in December 2015, the Fed Funds
rate has increased by 225bp. The Federal Reserve also continued quantitative tightening
(a gradual reduction in its balance sheet). This more restrictive approach led to
a significant rise in short term rates, incorporating continued monetary tightening
(2-year sovereign yields rose by 75bp over the year, reaching 2.65% at year-end).
Despite a period slightly above 3%, long rates did not "overreact". Without any clear
inflation risk or strong inflationary anticipations, and profiting from bouts of strong
aversion to risk, they increased by only around 30 basis points over the year to just
2.8% at the end of December, leading to a marked flattening of the yield curve.
(1)
At the start of 2018, the Brent price stood at 67 US dollars a barrel, and peaked
at 86 dollars in early October before plummeting to 53 dollars at the end of December.
Over the first nine months, the increase was fuelled by production cuts by OPEC, a
collapse in production in Venezuela and the return of US sanctions on Iranian oil
exports. A temporary halt in production cuts by OPEC and Russia combined with a sharp
increase in production in the US sparked a tumble in the price during the last quarter
of 2018. On average Brent reached 71 dollars a barrel over the year (versus 54 dollars
a barrel in 2017).
In the Eurozone, growth dipped in the first quarter of 2018 (2.5% year-on-year
after
2.7% at the end of 2017) on foot of destocking (the restocking process had proved
excessive) and temporary disruptions such as strikes, weather effects, and the timing
effect of tax measures in France. This decline raised several questions to which exaggeratedly
pessimistic if not alarming responses were frequently given, even though the fundamentals
remained solid, suggesting it was a temporary phenomenon. Households and businesses
alike continued to consolidate their financial positions while also maintaining strong
expenditure. Growth in wages and disposable income underpinned household consumption
(at the cost of a slight fall in the savings rate) while good profit trends enabled
an acceleration of investment expenditure and an increase in the investment rate.
Anticipations were that economic growth would evolve gradually closer to its potential
rate (estimated at 1.5%), therefore still a normal trajectory, i.e. slowing from an
annual rate of 2.8% at its 2017 peak to 2.2% in spring 2018. After the summer, the
slowdown amplified and despite the publication of positive data, surveys revealed
a deterioration in sentiment. Threats of protectionism by Donald Trump created a climate
of uncertainty and a wait-and-see approach that was not conducive to investment. In
the meantime, the appointment of a populist government in Italy created fresh shock
waves in Europe. The ramp-up of trade tension and the Italian political crisis weighed
heavily on Europe's financial markets. GDP fell to 1.6% year-on-year in the third
quarter after 2.2% in the second quarter. Temporary factors linked to new European
standards caused disruption in the automotive sector, but a catch-up is expected.
Despite such jolts, exaggerated fears of a possible drastic and imminent downturn
in the cycle and weaker foreign demand, growth had the potential to reach 1.9% in
2018 versus 2.6% in 2017: a commendable rate that would not fuel inflation (1.6% after
1.5% in 2017). The European Central Bank (ECB) thus prolonged its quantitative easing
programme until December 2018 (after which it said it would discontinue its net purchases)
while reducing the monthly amount of its sovereign security purchases (from 30 billion
euros to 15 billion euros starting in September 2018). Despite monetary tightening
in the US and the implementation of a gradually less accommodative monetary policy,
core European rates did not suffer. After increasing to nearly 0.8% at the end of
February (rising by 35 basis points in two months), German 10-year yields began to
fall again, reaching a low of 0.25% at the height of the Italian political crisis.
After small spikes while remaining weak, they moved back to 0.2% at the end of December,
taking advantage of a surge in aversion to risk caused by US protectionist policies
as well as uncertainties around the extent of the economic slowdown (actual data and
announcements). French and Italian yields evolved in line with internal political
developments: at the end of December the spread between French yields and the Bund
was close to 45bp, i.e. 10-15bp more than before the start of the "yellow vest" crisis,
while the spread in relation to Italian yields tightened to less than 260bp versus
a peak of 320bp at end-November during the height of the contentious budget negotiations
with the European Commission. After strong losses in December, both the European and
US equity markets registered a decline over the year (Eurostoxx 50 and S&P 500
down
by nearly 15% and 8.5% respectively). Finally, although it is generally deemed undervalued
but exposed to bouts of risk aversion, the euro depreciated by nearly 5% against the
US dollar in 2018.
1.3 CONSOLIDATED
NET INCOME
Condensed consolidated
income statement
► 2018
| € million |
Underlying CIB(1) |
Non-recurring(1) |
Stated CIB |
Private Banking |
Corporate Center |
Underlying CIB Change 2018/2017 |
| Net Banking Income |
4,409 |
45 |
4,454 |
822 |
|
(4%) |
| Operating expenses |
(2,610) |
|
(2,610) |
(711) |
|
+2% |
| Gross Operating Income |
1,799 |
45 |
1,844 |
111 |
|
(11%) |
| Cost of risk |
60 |
|
60 |
(5) |
|
|
| Pre-tax income |
1,859 |
45 |
1,904 |
106 |
(0) |
(2%) |
| Corporate income tax |
(489) |
(11) |
(500) |
(29) |
4 |
(20%) |
| Net income |
1,370 |
34 |
1,404 |
77 |
4 |
+7% |
| Non-controlling interests |
(2) |
|
(2) |
8 |
|
|
| Net income, Group Share |
1,372 |
34 |
1,406 |
69 |
4 |
+7% |
| € million |
CACIB |
Underlying CIB Change 2018/2017
at constant rate |
| Net Banking Income |
5,276 |
(2%) |
| Operating expenses |
(3,321) |
+3% |
| Gross Operating Income |
1,955 |
(9%) |
| Cost of risk |
55 |
|
| Pre-tax income |
2,010 |
(1%) |
| Corporate income tax |
(525) |
(17%) |
| Net income |
1,485 |
+10% |
| Non-controlling interests |
6 |
+5% |
| Net income, Group Share |
1,479 |
+10% |
(1)
Restated from loan hedges and DVA running impact on NBI for respectively € 23m, €
22m in 2018.
► 2017
| € million |
Underlying CIB(1) |
Non-recurring(1) |
CIB |
Private Banking |
Corporate Center(2) |
CACIB |
| Net Banking Income |
4,587 |
(133) |
4,454 |
765 |
(220) |
4,999 |
| Operating expenses |
(2,560) |
|
(2,560) |
(625) |
|
(3,185) |
| Gross Operating Income |
2,027 |
(133) |
1,894 |
140 |
(220) |
1,814 |
| Cost of risk (3) |
(319) |
|
(319) |
(11) |
|
(330) |
| Share of net income of equity-accounted entities |
175 |
102 |
277 |
|
|
277 |
| Gain/losses on other assets |
12 |
|
12 |
6 |
|
18 |
| Pre-tax income |
1,895 |
(31) |
1,864 |
135 |
(220) |
1,779 |
| Corporate income tax |
(611) |
(49) |
(660) |
(15) |
61 |
(614) |
| Net income |
1,284 |
(80) |
1,204 |
120 |
(159) |
1,165 |
| Non-controlling interests |
(2) |
|
(2) |
11 |
|
9 |
| Net income, Group Share |
1,286 |
(80) |
1,206 |
109 |
(159) |
1,156 |
(1)
Restated for loan hedges and debt value adjustment (DVA) impacts on NBI for -€57 million
and -€76 million, respectively for gains on the disposal of BSF as a proportion of
equity method (EM) net income for +€102 million and for tax (exceptional for -€95
million and net income tax effect on DVA and loan hedges of +€46 million) in 2017.
(2)
Including a debt revaluation for -€220 million in NBI.
(3)
Including legal provisions for -€115 million in 2017.
The market environment is 2018 remained challenging, affected by a variety of political
and commercial events.
In Europe, the ECB's and BoE's monetary policies reflected the end of quantitative
easing. The future of the Eurozone remains the primary uncertainty with Brexit and
the Italian budget.
In the United States, buoyed by growth expectations, the Fed maintained its rate
increase
policy by raising the prime rate to 2.5%. In Asia, the trade war between China and
the U.S.A. fierce at the start, seemed to have settled down by year end.
Against this background, underlying CIB revenues fell -4% (-2% at constant rates).
Revenue from financing activities rose +8% (+10% at constant rates) with good performance
from all business lines and a concentration of major deals. Revenue from capital markets
and investment banking fell -16% (-15% at constant rates) in an unfavourable market
environment for certain fixed income activities and with lower volumes in investment
banking compared to the good levels in 2017.
Expenses rose +2% (3% at constant rates), largely due to organic growth, information
technology expenditures and the integration of headcount from Crédit Agricole S.A.'s
Banking Services Department.
Excluding the SRF (up 11%), the cost/income ratio of the underlying CIB came through
at 55.1% in 2018.
Gross operating income was €1,799 million at current rates.
The cost of risk was sharply reduced as a result of a low cost of specific risk
following
the derecognition of a number of loans and net reversals in buckets 1 and 2.
The share of net income from equity accounted entities was zero, whereas 2017 included
€175 million from the share in the Saudi Fransi Bank.
Net income, Group share, was €1,372 million, up 7%. Excluding BSF, net income,
Group
share, rose 21%.
1.4 RESULTS BY
BUSINESS LINES
Financing activities
| € million |
2018(1) |
2017(1) |
Change 2018/2017 |
Change 2018/2017 at constant rate |
| Net Banking Income |
2,487 |
2,309 |
+8% |
+10% |
| Operating expenses |
(994) |
(945) |
+5% |
+7% |
| Gross Operating Income |
1,493 |
1,364 |
+9% |
+15% |
| Cost of risk |
82 |
(260) |
ns |
|
| Share of net income of equity-accounted entities |
|
175 |
ns |
|
| Gain/losses on other assets |
|
12 |
ns |
|
| Pre-tax income |
1,575 |
1,291 |
+22% |
|
| Corporate income tax |
(415) |
(431) |
(4%) |
|
| Net income |
1,160 |
860 |
+35% |
|
| Non-controlling interests |
(2) |
(1) |
+100% |
|
| Net income, Group Share |
1,162 |
861 |
+35% |
|
(1)
- Restated for loan hedges in NBI for €+23 million and €-57 million for 2018 and 2017,
respectively, from gains on disposals of BSF for +€102 million as a proportion of
EM net income and taxes (exceptional for €-95 million and tax effect on loan hedges
of €+20 million).- Including legal provisions for -€57.5 million for 2017.
Revenue from financing activities was up 8% (10% at constant exchange rates), driven
both by structured finance activities and commercial banking.
The increase in revenue from structured finance was essentially driven by major
deals
in the Telecoms and Energy sectors. Crédit Agricole CIB is still the global leader
in aeronautics financing (1) and has risen three places to become the world's
4 th largest project finance provider (2) .
Commercial banking revenue rose thanks to both export finance, international trade
financing and cash management activities (International Trade & Transaction Banking),
and corporate lending activities and distribution (Debt Optimisation and Distribution).
In International Trade and Transaction Banking (ITB), strong performance came from
Private Equity Financing Solutions in partnership with CACEIS and the rise in oil
prices had a positive impact on Global Commodities Finance. Trade performed very strongly,
as did revenue from consolidation of the Correspondent Banking activity of Crédit
Agricole S.A. Debt Optimisation and Distribution activities were also well-positioned,
thanks to acquisition finance including two major transactions and the securing of
key bilateral loans. Crédit Agricole CIB has improved its positioning on syndicated
loans, rising from 4 th place to 2 nd place (3) in
syndicated finance to Corporates in the EMEA region.
The operating coefficient was 40%, at the same level as 2017. The cost of risk
was
sharply reduced as a result of a low cost of specific risk following the derecognition
of a number of loans, and net reversals in buckets 1 and 2.
The share of net income from equity accounted entities was zero, whereas 2017 included
€127 million from the share in the Saudi Fransi Bank under financing activities.
The contribution to net income, Group Share was €1,162 million, a 35% rise compared
to 2017 thanks to the combined effect of an increase in revenue from the business
lines and a recovery in cost of risk.
(1)
Source: Air Finance Journal.
(2)
As mandated arranger by volume in 2018. Source: Refinitiv X02.
(3)
As bookrunner - Source Refinitiv T78.
Capital Markets
and Investment Banking
| € million |
Underlying 2018(1) |
Underlying 2017(1) |
Change 2018/2017 |
Change 2018/2017 at constant rate |
| Net Banking Income |
1,922 |
2,278 |
(16%) |
(15%) |
| Operating expenses |
(1,616) |
(1,615) |
|
+1% |
| Gross Operating Income |
306 |
663 |
(54%) |
(52%) |
| Cost of risk |
(22) |
(59) |
(63%) |
|
| Pre-tax income |
284 |
604 |
(53%) |
|
| Corporate income tax |
(74) |
(180) |
(59%) |
|
| Net income |
210 |
424 |
(50%) |
|
| Non-controlling interests |
|
(1) |
ns |
|
| Net income, Group Share |
210 |
425 |
(51%) |
|
(1)
- Not including the DVA impact on net banking income for €+22 million for 2018 and
€-76 million for 2017.- Including legal provisions for -€57.5 million for 2017.
Revenue from Capital Markets and Investment Banking fell -16% (-15% at constant
exchange
rates).
In a difficult environment since the start of the year, revenue from the Fixed
Income
business fell, despite rising trading volumes, except in credit. The Rates business
continued to suffer from decreasing margins. Credit suffered both from conditions
unfavourable to issues, a deterioration which worsened in the fourth quarter, and
a high comparative basis in 2017 which had good primary and secondary market revenue.
Securitisation and foreign exchange performed well.
In 2018, Crédit Agricole CIB ranked first worldwide in the supranational issues
(1) , gaining 2.4 market share points compared to 2017. In the field of
green financing,
Crédit Agricole CIB is still the world leader in the Green bonds (2) market.
Investment Banking revenue fell, particularly on M&A activities, despite the
high
level of business. Volumes in Equity Capital Markets were also lower than in 2017,
resulting in decreased revenue. Strategic Equity Transactions suffered from unfavourable
market conditions, particularly in the last quarter, despite buoyant trading activity,
while Structured Finance Solutions performed well.
Crédit Agricole CIB was ranked 3 rd place (3) in France in
equity issues and gained 3.6 market share points.
The contribution to net income Group share of the Capital markets and investment
banking
amounted to 210 million euros.
(1)
As bookrunner - source: Refinitiv (N5).
(2)
As bookrunner - source: bloomberg.
(3)
As bookrunner - source: Refinitiv.
Wealth Management
| € million |
2018 |
2017 |
Change 2018/2017 |
Change 2018/2017 at constant rate |
| Net Banking Income |
822 |
765 |
+7% |
+9% |
| Operating expenses |
(711) |
(625) |
+14% |
+16% |
| Gross Operating Income |
111 |
140 |
(21%) |
|
| Cost of risk |
(5) |
(11) |
(55%) |
|
| Gain/losses on other assets |
|
6 |
ns |
|
| Pre-tax income |
106 |
135 |
(21%) |
|
| Corporate income tax |
(29) |
(15) |
+93% |
|
| Net income |
77 |
120 |
(36%) |
|
| Non-controlling interests |
8 |
11 |
(27%) |
|
| Net income, Group Share |
69 |
109 |
(37%) |
|
Wealth Management revenues registered growth of 7% (9% at constant rates). This
increase
came from the positive contribution of various external growth acquisitions.
Expenses rose 14% (16% at constant rates) and include the costs associated with
the
expanded scope of consolidation and the strengthening of compliance teams.
At 31 December 2018 AUM in wealth management were €122,8 billion, up €4.5 billion
(+3.8%) compared to 31 December 2017, primarily due to the acquisition of Banca Leonardo
in Italy, which contributed €5.1 billion, and to organic growth, with net inflows
of €3.0 billion in 2018. Offset against that, the market effect was a negative €3.6
billion.
Corporate Center
| € million |
2018 |
2017 |
Change 2018/2017 |
| Net Banking Income |
|
(220) |
ns |
| Corporate income tax |
4 |
61 |
ns |
| Net income, Group Share |
4 |
(159) |
ns |
At 31 December 2017, the Corporate Centre business line consists solely of the
impact
of changes in the issuer spread of Crédit Agricole CIB issues and reflected the credit
spread evolution on our issues accounted in fair value.
At 31 December 2018, with the implementation of IFRS9, the impact of changes in
the
issuer spread is now accounted in Equity and stands at € 367 million for the year.
1.5 CRÉDIT AGRICOLE
CIB CONSOLIDATED BALANCE SHEET
Assets
| € billion |
31.12.2018 |
01.01.2018 |
| Cash, central banks |
46.5 |
32.6 |
| Financial assets at fair value through profit or loss
(excluding repurchase agreements) |
132.1 |
144.8 |
| Hedging derivative Instruments |
1.0 |
1.1 |
| Financial assets at fair value through other comprehensive
income |
11.4 |
18.4 |
| Financial assets at amortised cost |
180.1 |
167.4 |
| Current and deferred tax assets |
1.1 |
1.3 |
| Repurchase agreements |
109.9 |
95.2 |
| Accruals, prepayments and sundry assets |
27.9 |
26.6 |
| Property, plant, equipment and intangible assets |
0.7 |
0.6 |
| Goodwill |
1.0 |
1.0 |
| Total assets |
511.7 |
489.0 |
At 31 December 2018, Crédit Agricole CIB had total assets of €511.7 billion, up
by
€22.7 billion compared to 1 January 2018. The impact of US Dollar exchange rates is
+€5 billion and that of the Yen is +€2 billion. The main variances concern the following
items.
MONEY MARKET AND
INTERBANK ITEMS
Crédit Agricole CIB has access to all major international liquidity centres and
is
very active in the largest financial markets (Paris, New York, London and Tokyo),
which enables it to optimise its interbank lending and borrowing within the Group.
FINANCIAL ASSETS
AND LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS
Financial assets and liabilities at fair value through profit or loss were down
by
€12.7 billion and €11.1 billion respectively over the period. On the asset side, they
consist mainly in the positive fair value of interest rate derivatives and of the
portfolio of securities held for trading, while on the liabilities side they reflect
the negative value of derivatives and securities sold short. The fall in outstandings
was essentially due to the drop in mark-to-market value of derivatives (€13.8 billion
on the assets side and €16 billion on the liabilities side), particularly on interest
rate derivatives.
SECURITIES BOUGHT
OR SOLD UNDER REPURCHASE AGREEMENTS
The repo activities are largely concentrated in Paris, which accounted for 68%
of
securities purchased and 64% of securities sold under repurchase agreements. The increase
in securities received and given under repurchase agreements in 2018 comes mainly
from the increase in trading activities by Crédit Agricole CIB Paris and Crédit Agricole
CIB New York.
The main transactions entered into with related parties are disclosed in the consolidated
financial statements for the year ended 31 December 2018, in the "General framework
- related parties" section.
Liabilities
| € million |
31.12.2018 |
01.01.2018 |
| Central banks |
0.9 |
1.6 |
| Financial liabilities at fair value through profit or
loss (excluding repurchase agreements) |
158.9 |
170.0 |
| Hedging derivative Instruments |
1.0 |
1.0 |
| Financial liabilities at amortised cost |
220.0 |
196.4 |
| Repurchase agreements |
78.3 |
69.9 |
| Current and deferred tax liabilities |
2.0 |
1.8 |
| Accruals, deferred income and sundry liabilities |
23.5 |
22.6 |
| Provisions |
1.7 |
1.7 |
| Subordinated debt |
5.0 |
5.1 |
| Equity - Group share |
18.8 |
18.8 |
| Non-controlling interests |
0.1 |
0.1 |
| Net income (loss) for the year |
1.5 |
|
| Total liabilities and equity |
511.7 |
489.0 |
ACCRUAL AND DEFERRED
INCOME AND SUNDRY ASSETS AND LIABILITIES
Accruals, deferred income and sundry assets and liabilities consist mainly of security
deposits on market and brokerage transactions.
SHAREHOLDERS'
EQUITY GROUP SHARE
The Group share of shareholders' equity (excluding net income for the period) was
€18.8 billion, down by €1.1 billion compared with the figure at 31 December 2017.
This change results essentially from the payment of dividends (€1.2 billion), an AT1
issue (€1.0 billion) and the payment of interest on the AT1 issue (€0.2 billion).
1.6 RECENT TRENDS
AND OUTLOOK
2019 outlook
The risks on the horizon are numerous, with various origins and varying consequences
and probabilities of occurrence: a trade war and more generally protectionism and
doubts around multilateralism, a slowdown in China, the winding down of fiscal stimulus
in the US, Brexit, and social and political tension in Europe, France in particular.
Although we don't underestimate the uncertainties, we believe economic growth in 2019
will slow down rather than collapse, but we are nevertheless maintaining prudent assumptions.
First-of-all we expect the Chinese-US trade war to continue despite recent rumours
of a possible hiatus. The US and China's announced agreement at the G20 summit to
allow further negotiations for ninety days before threatened tariff increases by the
US from 10% to 25% on 200 billion dollars of products imported from China and efforts
by China to increase imports from the US is but a temporary truce. It cannot be seen
as a prelude to a resolution of the trade conflict between the two sides given their
entrenched positions. That said, the US is likely to keep this war confined to China
without targeting other victims, such as the European Union. Our scenario also factors
in an adjustment of Saudi Arabia's oil supply in line with the market, which will
partly offset continued strong production in the US: this would allow the oil price
to remain at around 70 US dollars a barrel, but there is a risk of high volatility.
The varying degrees of economic slowdown already evident in 2019 come therefore against
the backdrop of this trade war and "well behaving" oil prices. While the Eurozone
is struggling to catch its breath, Japan is having trouble bolstering domestic demand,
Chinese growth is expected to disappoint (in the early part of the year at any rate)
despite the government stimulus plan, and the US is likely to see another year of
strong growth.
The current cycle, which started in June 2009, is the longest in US history. After
peaking at close to 3% in 2018, US growth is starting to slow. But it is likely to
remain above potential (2%) at close to 2.6% in 2019. Spontaneous forces (from the
production investment cycle notably) are nevertheless fading and monetary and fiscal
stimulus are being wound down. As a result, corporate investment should be weaker
in 2019. And the outlook for an improvement in housing investment is gloomy. At the
end of 2019, when the fiscal stimulus that propelled the cycle well beyond its natural
high over two years almost comes to an end, a new more restrictive monetary policy
and ongoing US-Chinese trade tensions are likely to herald the end of a period of
exceptionally strong and lasting growth. The risk of a recession hangs in 2020.
In the Eurozone, while growth is being underpinned by an accommodative monetary
policy
and the budgetary policy, still strong fundamentals signal the maturing of the cycle,
although no change is imminent yet. Fears around the strength of growth have changed
in nature. The concerns about supply constraints that appeared at the cycle peak at
end-2017 have faded. The latter are no longer capable of causing an erosion in margins
that would spark a sudden downturn. However, new worries, as revealed in less positive
surveys, have emerged which contrast with the good results borne out in the actual
data. These are mainly exogenous (and have been raised before), weighing on the outlook
for growth in external demand and investment, and suggest a more marked slowdown in
growth than would naturally be expected. Our scenario factors in a weakening of growth
(1.9% in 2018 followed by 1.6% in 2019, close to its potential level of 1.5%) mainly
attributable to growing uncertainties, leading in turn to more cautious investment
trends. In France, growth should remain close to its 2018 level (1.6% after 1.5% in
2018). The implementation in early 2019 of measures to stimulate purchasing power
should underpin household consumption and push growth up by +0.2 percentage point
in 2019. However, given the deterioration in economic indicators and growing uncertainty,
we have revised down slightly our anticipations for investment and exports. Although
we cannot rule out further social unrest, our projection assumes a relative easing
of demonstrations by the "yellow vest" movement in 2019. In the United Kingdom, after
Parliament's rejection on 15 January of the withdrawal agreement signed by Theresa
May and the European Union, the country's economic outlook is highly uncertain. An
extension of negotiations beyond 29 March seems increasingly likely if the European
Union is in favour. Optimists believe an orderly Brexit is still possible with support
from the UK Parliament. However, a no-deal scenario if nothing is done to avoid it
by 29 March also looks more likely the nearer the withdrawal date comes. This environment
is weighing on the confidence of UK investors and consumers but is not impacting the
overall scenario for the Eurozone.
In Japan, the outlook remains gloomy. In December 2018, the "Abenomics" programme
of policies reached its seventh year in operation. Exports continue to stimulate growth,
while private consumption lags behind. The latter will be further aggravated by a
VAT increase scheduled for 2019. After reaching nearly 0.7% in 2018, growth is expected
at just 0.6% in 2019.
Finally, after a difficult year in 2018 that saw the emerging financial markets
(foreign
exchange markets in particular) in turmoil, economic growth in those countries is
likely to continue slowing to roughly 4.1% after reaching around 4.4% in 2018. 2019
looks very uncertain both in terms of growth and the markets, particularly given that
China could be a specific source of volatility in the early part of the year. Like
other emerging countries, China suffered a slowdown, which its specific efforts to
reduce its debt are amplifying. In 2019, against the backdrop of a trade war, the
negative impact on external trade from the imposition of higher trade tariffs by the
US will materialise. Since China had ramped up its exports in anticipation of the
threatened tariff increases in January 2019, exports could slow in early 2019. Policy
makers have thus far responded to the decline with a series of budgetary and monetary
measures and moves to stimulate credit. But they have been careful not to overreact
and aggravate the internal debt problem. Before those stimulus measures fully take
effect, activity could dip during the initial months and raise concerns of an aggravation
of the economic slowdown. Over full year 2019, however, growth could edge close to
6.4%, registering just a small and painless decline in relation to 2018 (around 6.6%).
Monetary policy in 2019 is likely to be prudent in light of the slowdown while
inflation,
which would normally be reaching the end of its cycle, is not likely to show any obvious
signs of change, such is the distended nature of the link between wages and prices.
In the US, while headline inflation has fallen on average (from 2.4% to 1.8%), inflation
as measured by the central bank (expected at 2.1%) is likely to largely surpass the
target level. Given the downward revision to the Fed Funds target rate (2.75%) in
particular, the Federal Reserve can pursue monetary tightening at its ease. As it
is more dependent on economic data, and thus more uncertain, US monetary policy is
only likely to be tightened around the end of 2019. We are projecting two 25bp increases
in the Fed Funds rate, bringing it to 3% at the end of 2019. Where the ECB is concerned,
the end of its quantitative easing programme (end of its net purchases under the Expanded
Asset Purchase Programme since January 2019) signals just the beginning of normalisation.
This preliminary stage does not in any way signify that monetary policy will become
much less accommodative. Although the ECB says it is confident that inflation will
recover, convergence with the 2% target seems highly uncertain. The prospects for
a recovery are tenuous: headline inflation (1.6% at end-2018 and core inflation of
1%) could decrease in 2019 (1.2% at end-2019 and core inflation of 1%) and fall as
low as 0.6%/0.7% at the end of the summer. With inflation low and under control, and
few traditional tools to hand, the ECB is left somewhat helpless. In addition to its
commitment to keep interest rates low for a long period (even if a symbolic increase
in the deposit rate from -0.40% to -0.25% is possible mid-way through the year), the
ECB could announce a new series of LTRO in March, which would come into effect in
June. The Eurozone economy is still in need of an accommodative monetary policy.
The end of the cycle looks like it will not bring with it unmanageable inflationary
pressures; the central banks remain prudent; monetary tightening, whether actual measures
or just announcements, will be gradual; and finally, several economic and political
uncertainties that could cause a drastic surge in risk aversion are obscuring the
horizon. Risky assets (equities, corporate bonds, emerging markets) are thus more
vulnerable. This context is nevertheless conducive to a very modest rise in long-term
risk-free rates, but accompanied by high volatility. Our scenario factors in US and
German 10-year rates close to 3.3% and 0.6% respectively at the end of 2019. As regards
the risk premiums offered by French and Italian sovereign bonds in relation to the
Bund, we put these at close to 30bp and 240bp respectively at the end of 2019.
2019 outlook for
Crédit Agricole CIB
Net income, Group Share grew markedly compared with 2017: revenue was characterised
by a good level of activity in Financing activities and a significant fall in Market
activities in an unfavourable environment, particularly in the credit businesses.
Expenses are under control. The cost of risk registered a net upturn over the year.
Against this backdrop, apart from the average annual growth rate of revenue from
Capital
Markets and Investment Banking, all targets in the Ambition 2020 Medium Term Plan
published in March 2016 were exceeded.
On 6 June 2019 the new Crédit Agricole Group Strategic Medium Term Plan will be
announced.
This will include general guidance for Crédit Agricole CIB's activities for the next
four years. Crédit Agricole CIB will continue to aim to be the preferred partner,
committed over the long term with its customers, in a global approach with the Crédit
Agricole Group.
2. INFORMATION
ON THE FINANCIAL STATEMENTS OF CRÉDIT AGRICOLE CIB (S.A.)
2.1 CONDENSED
BALANCE SHEET OF CRÉDIT AGRICOLE CIB (S.A.)
Assets
| € billion |
31.12.2018 |
31.12.2017 |
| Interbank and similar transactions |
139.0 |
122.5 |
| Customer transactions |
162.0 |
145.3 |
| Securities transactions |
30.1 |
30.9 |
| Accruals, prepayments and sundry assets |
143.6 |
156.6 |
| Non-current assets |
6.7 |
6.5 |
| Total assets |
481.4 |
461.8 |
Liabilities
| € billion |
31.12.2018 |
31.12.2017 |
| Interbank and similar transactions |
74.7 |
74.8 |
| Customer accounts |
167.7 |
138.8 |
| Debt securities in issue |
43.3 |
40.5 |
| Accruals, deferred income and sundry liabilities |
170.2 |
183.0 |
| Impairment and subordinated debt |
11.6 |
10.7 |
| Fund for General Banking Risks |
|
0.1 |
| Shareholders' equity (excl. FGBR) |
13.9 |
13.9 |
| Total Liabilities and shareholders' equity |
481.4 |
461.8 |
Crédit Agricole CIB (S.A.) had total assets of €481.4 billion at 31 December 2018,
up €19.6 billion compared with 31 December 2017.
Money market and
interbank items
Interbank assets increased by €16.5 billion (13.4%), with variances of +€13.0 billion
in deposits with central banks, +€2.6 billion in treasury bills and +€0.8 billion
in receivables from credit institutions (including -€7.7 billion on accounts, long-term
loans and demand loans and +8.6 billion on pledged securities).
Interbank liabilities fell -€0.1 billion (-0.1%) including -€0.7 billion less to
central
banks and +€0.6 billion more debts to credit institutions (i.e. +€3.6 billion more
on term and sight accounts and borrowings and -€3 billion less on securities sold
under repurchase agreements.
Customer transactions
Assets and liabilities on customer transactions increased by €16.7 billion (+11.5%)
and €28.9 billion (+20.9%) respectively.
On the assets side, the increase came from trade receivables for €1.6 billion (+39.0%),
€9.2 billion in customer loans (+10.5%) and €6.0 billion in securities under repurchase
agreements (+11.0%)
On the liabilities side, current accounts, repurchase agreements and other debts
rose
by €5.4 billion (+21.8%), €11.3 billion (+23.4%) and €12.3 billion (+18.7%) respectively.
Portfolio securities
and debts represented by a security
Securities transactions on the asset side decreased by €0.8 billion (-2.7%). This
decrease is due to a €3.3 billion fall in equities and other variable-income securities,
mainly on the trading securities portfolio, which was partially offset by a €2.5 billion
rise in fixed-income bonds.
Debt instruments rose by €2.8 billion (+7.0%). This increase was due to both negotiable
debt securities (+€1.4 billion) and bonds (+€1.4 billion).
Accrual and deferred
income and miscellaneous assets and liabilities
This item principally records the fair value of derivative instruments. As a reminder,
these are covered in "Financial assets and liabilities at fair value" in the consolidated
financial statements.
The decrease in "Accruals, deferred income and sundry assets and liabilities",
was
€12.9 billion, both on the assets side (-8.3%) and the liabilities side (-7%).
"Other assets" and "Other liabilities" which decreased by €5.9 billion and €0.8
billion,
respectively, are mainly comprised of premiums on conditional derivative instruments
and sundry debtors and creditors.
On the assets side, financial options bought and miscellaneous debtors fell by
€3.8
billion and €2.5 billion, respectively.
Accrual and deferred income, mainly the fair value of the derivative instruments,
fell by €7 billion on the assets side and €12.1 billion on the liabilities side.
Provisions and
subordinated debt
Provisions were stable at €3.2 billion, and subordinated debt rose €0.8 billion
(+11.1%),
essentially on debt in euros (€0.7 billion rise).
Non-current assets
Non-current assets rose very slightly, by €0.2 billion. These break down into €6.4
billion in equity investments and other long-term investment securities and €0.3 billion
of property, plant and equipment and intangible assets.
Accounts payable
by due date: Crédit Agricole CIB (S.A.)
Under article L. 441-6-1 of the French Commercial Code, companies whose parent
company
financial statements are certified by a Statutory Auditor are required to disclose
in their management report the net amounts due to supplier by due date, in accordance
with the terms and conditions set out in article D4 41-4 of Decree no. 2008-1492.
|
|
31.12.2018 |
| € thousands |
≤ 30 days |
>30 days ≤ 60 days |
>60 days |
Total |
| Accounts payable |
7,676 |
10,569 |
(132) |
18,113 |
|
|
31.12.2017 |
| € thousands |
≤ 30 days |
>30 days ≤ 60 days |
>60 days |
Total |
| Accounts payable |
4,903 |
7,763 |
3,872 |
16,538 |
The median payment period for accounts payable at Crédit Agricole CIB is 32 days.
Crédit Agricole CIB had outstanding payables of €18.1 million at 31 December 2018,
compared with €16.5 million at 31 December 2017
Information on
suppliers payment delays by Crédit Agricole CIB Paris
► Invoices received
that have been late in payment during the financial year
|
|
31.12.2018 |
| € thousands |
0 jour |
≥ 1 days ≤ 30 days |
>30 days ≤ 60 days |
>60 days ≤ 90 days |
>90 days |
Total (1 day and more) |
| Number of invoices concerned |
18,895 |
8,702 |
2,467 |
917 |
943 |
13,029 |
| Aggregate amount of the invoices concerned excl. VAT |
318,113 |
272,991 |
60,304 |
23,428 |
50,600 |
407,323 |
| Percentage of the total amount of invoices received during
the year, excl. VAT |
43.85% |
37.63% |
8.31% |
3.23% |
6.98% |
|
► Invoices received
and not paid at the closing date whose payment term has expired
|
|
31.12.2018 |
| € thousands |
0 jour |
≥ 1 jour ≤ 30 days |
>30 days ≤ 60 days |
>60 days ≤ 90 days |
>90 days |
Total (1 day and more) |
| Number of invoices concerned |
1,001 |
153 |
15 |
2 |
|
170 |
| Aggregate amount of the invoices concerned excl. VAT |
10,966 |
1,736 |
51 |
3 |
|
1,790 |
| Percentage of the total amount of invoices received during
the year, excl. VAT |
85.97% |
13.61% |
0.40% |
0.03% |
|
|
Accounts receivable
information
Compliance with the contractual terms and conditions of accounts receivable is
monitored
as part of the bank's risk management loans and receivable due from customers are
detailed in note 3.1 of the parent company financial statement.
Informations on
inactiv bank accounts
Under Articles L. 312-19 and L. 312.20 of the French Monetary and Financial Code,
issued by the Law No 2014-617 of 13 June 2014 relative to unclaimed assets on inactive
bank accounts, named Law Eckert which came into force on 1 January 2016, every credit
institution is required to publish annual information on inactive bank accounts. At
end 2018, Crédit Agricole CIB S.A. registers 10 inactive bank accounts for a total
of assets estimated to €222,525.52.
At the end of the 2018 financial period, a total amount of €5,280.95 has been transferred
to the Caisse des Dépôts et Consignations related to one identified inactive bank
accounts in Crédit Agricole CIB books.
2.2 CONDENSED
INCOME STATEMENT OF CRÉDIT AGRICOLE CIB (S.A.)
| € million |
31.12.2018 |
31.12.2017 |
| Net Banking Income |
3,814 |
4,587 |
| Operating expenses |
(2,447) |
(2,341) |
| Gross operating income |
1,367 |
2,246 |
| Cost of risk |
195 |
(300) |
| Net Operating Income |
1,562 |
1,946 |
| Net gain/(loss) on fixed assets |
20 |
1,181 |
| Pre-tax income |
1,582 |
3,127 |
| Corporate income tax |
(415) |
(514) |
| Net allocation to FGBR and regulated provisions |
105 |
|
| Net income |
1,272 |
2,613 |
Net banking income for the 2018 financial year reached € +3.8 billion, €0.7 billion
higher than at 31 December 2017.
This fall in the net banking income is partially due to an error being corrected
impacting
the 2017 net income by +€416 million. It related to a regularisation of the staggering
of up-front fees, received and paid, relating to the purchase and sale of CDS recognised
as hedging, over the course of several prior financial years.
General operating expenses, excluding amortisation and provisions, increased by
€106
million (+4.8%).
In view of these factors, gross operating income decreased by €0.8 billion, to
€1.4
billion at 31 December 2018.
The cost of risk was €+195 million in 2018 compared to -€300 million in 2017.
Net gain on fixed assets was €20 million in 2018. As a reminder, the 2017 net income
was mainly comprised (in the amount of €1.215 million) of gains on disposals of Banque
SAUDI FRANSI securities.
100% owned by Crédit Agricole S.A., whether directly or indirectly, Crédit Agricole
CIB is part of the tax consolidation group constituted by Crédit Agricole S.A. and
is head of the Crédit Agricole CIB tax sub-group constituted with the member subsidiaries
of the tax consolidation group.
The "Income tax charge" for 2018 was €0.4 billion.
The final part of the income statement, the €105 million provision for general
banking
costs and risks, was fully reversed during 2018. Crédit Agricole CIB (S.A.) recorded
net income of €1.3 billion in 2018, compared to €2.6 billion in 2017.
2.3 FIVE-YEAR
FINANCIAL SUMMARY
| Items |
|
2014 |
|
2015 |
|
2016 |
| Share capital at year-end (€) |
EUR |
7,254,575,271 |
EUR |
7,327,121,031 |
EUR |
7,851,636,342 |
| Number of shares issued |
|
268,687,973 |
|
271,374,853 |
|
290,801,346 |
| Total results of realized transactions (in € million) |
|
|
|
|
|
|
| Gross revenue (excl. Tax) |
EUR |
8,178 |
EUR |
7,808 |
EUR |
7,306 |
| Profit before tax, amortization and reserves |
EUR |
48 |
EUR |
770 |
EUR |
1,223 |
| Corporate income tax |
EUR |
(77) |
EUR |
(45) |
EUR |
279 |
| Profit after tax, amortization and reserves |
EUR |
1,318 |
EUR |
434 |
EUR |
682 |
| Amount of dividends paid |
EUR |
999 |
EUR |
899 |
EUR |
983 |
| Earning per share (€) |
|
|
|
|
|
|
| Profit after tax, before amortization and reserves |
|
(1) 0.46
|
|
(2) 2.70
|
|
(3) 5.34
|
| Profit after tax, amortization and reserves |
|
(1) 4.90
|
|
(2) 1.62
|
|
(3) 2.42
|
| Dividend per share |
EUR |
3.72 |
EUR |
3.34 |
EUR |
3.38 |
| Staff |
|
|
|
|
|
|
| Number of employees |
|
(6) 6,241
|
|
(6) 6,222
|
|
(6) 6,473
|
| Wages and salaries paid during the financial year (in
€ million) |
EUR |
942 |
EUR |
961 |
EUR |
1,000 |
| Employee benefits and social contributions (in € million) |
EUR |
276 |
EUR |
283 |
EUR |
304 |
| Payroll taxes (in € million) |
EUR |
39 |
EUR |
39 |
EUR |
35 |
| Items |
|
2017 |
|
2018 |
| Share capital at year-end (€) |
EUR |
7,851,636,342 |
EUR |
7,851,636,342 |
| Number of shares issued |
|
290,801,346 |
|
290,801,346 |
| Total results of realized transactions (in € million) |
|
|
|
|
| Gross revenue (excl. Tax) |
EUR |
9,470 |
EUR |
11,138 |
| Profit before tax, amortization and reserves |
EUR |
3,017 |
EUR |
1,004 |
| Corporate income tax |
EUR |
(514) |
EUR |
(415) |
| Profit after tax, amortization and reserves |
EUR |
2,613 |
EUR |
1,272 |
| Amount of dividends paid |
EUR |
1,236 |
EUR |
489 |
| Earning per share (€) |
|
|
|
|
| Profit after tax, before amortization and reserves |
|
(4) 8.61
|
|
(5) 2.72
|
| Profit after tax, amortization and reserves |
|
(4) 8.98
|
|
(5) 4.37
|
| Dividend per share |
EUR |
4.25 |
EUR |
1.68 |
| Staff |
|
|
|
|
| Number of employees |
|
(6) 6,768
|
|
(6) 7,371
|
| Wages and salaries paid during the financial year (in
€ million) |
EUR |
1,014 |
EUR |
1,037 |
| Employee benefits and social contributions (in € million) |
EUR |
323 |
EUR |
347 |
| Payroll taxes (in € million) |
EUR |
39 |
EUR |
42 |
(1)
Calculation based on the number of shares issued excluding treasury stock at end of
the 2014 financial year, i.e. 268,687,973 securities.
(2)
Calculation based on the weighted average number of ordinary shares outstanding during
the period, i.e. 268,791,031 securities.
(3)
Calculation based on the weighted average number of ordinary shares outstanding during
the period, i.e. 281,517,355 securities.
(4)
Calculation based on the number of shares issued excluding treasury stock at the end
of the 2017 financial year, i.e. 290,801,346 securities.
(5)
Calculation based on the number of shares issued excluding treasury stock at the end
of the 2018 financial year, i.e. 290,801,346 securities.
(6)
Average number of employees.
2.4 RECENT CHANGES
IN SHARE CAPITAL
The table below shows changes in Crédit Agricole CIB's share capital over the last
five years.
| Date and type of transaction |
Amount of share capital (€)
|
Number of shares |
| Share capital at 31.12.2014 |
7,254,575,271 |
268,687,973 |
| 18.12.2015 |
|
|
| Capital increase by the issue of shares for cash |
72,545,760 |
2,686,880 |
| Share capital at 31.12.2015 |
7,327,121,031 |
271,374,853 |
| 27.05.2016 |
|
|
| Capital increase by partial payment of the dividend in
shares |
52,236,414 |
1,934,682 |
| 27.06.2016 |
|
|
| Capital increase by the issue of shares for cash |
472,278,897 |
17,491,811 |
| Share capital at 31.12.2016 |
7,851,636,342 |
290,801,346 |
| Share capital at 31.12.2017 |
7,851,636,342 |
290,801,346 |
| Share capital at 31.12.2018 |
7,851,636,342 |
290,801,346 |
2.5 INFORMATION
ON CORPORATE OFFICERS
Disclosures relating to the compensation, terms of office and functions of corporate
officers pursuant to Article L. 225-37-2 of the French Commercial Code are provided
in the "Corporate Governance" section on pages 64 to 138.
Trading in the Company's shares by Corporate Officers: a paragraph concerning the
information that may be required under the terms of Article L. 621-18-2 of the French
Monetary and Financial Code and Article 223-26 of the General Regulations of the French
Financial Markets Authority (AMF) appears on page 103 and 104 of this Registration
Document.
2.6 INFORMATION
RELATING TO THE ARTICLE L. 225-102-1 OF THE FRENCH COMMERCIAL CODE
(CODE DE COMMERCE) DEALING WITH THE GROUP'S SOCIOENVIRONMENTAL IMPLICATIONS
Economic, social and environmental information of Crédit Agricole CIB group are
presented
in Chapter 2 of this Registration Document.
5. RISKS AND PILLAR
3
2017-2018 REGULATORY
VaR OF CRÉDIT AGRICOLE CIB € MILLION
CHANGES IN RISK-WEIGHTED
ASSETS FULLY LOADED BASEL III
| 14.4 % FULLY LOADED TIER 1 RATIO |
11.5% FULLY LOADED CET1 RATIO |
3.43% LEVERAGE RATIO |
REGULATORY RATIO
1. RISK FACTORS
This chapter of the Registration Document sets out the main types of risks to which
Crédit Agricole CIB is exposed, as well as certain risks related to holding securities
of Crédit Agricole CIB. Other parts of this chapter discuss Crédit Agricole CIB's
risk appetite and the policies employed to manage risks. The information on the management
of Crédit Agricole CIB's risks is presented in accordance with IFRS 7, relating to
disclosures on financial instruments.
A. OVERVIEW OF
RISKS TO WHICH CRÉDIT AGRICOLE CIB IS SUBJECT
Crédit Agricole CIB is primarily exposed to the following categories of risks in
connection
with the conduct of its activities:
| ― |
Risks relating to the environment in which Crédit Agricole CIB
operates: risks related
to the macroeconomic environment, market conditions and the legislative and regulatory
framework applicable to the Group and its activities.
|
| ― |
Credit and counterparty risk: risk of losses arising from a default
by a counterparty
leading to that counterparty's inability to meet its commitments to Crédit Agricole
CIB. The counterparty may be a financial institution, a supranational entity or agency,
a corporate body, a government, an investment fund, or a natural person. The largest
clients fall into the category of large multinational or major financial institution.
Credit risk arises in relation to the activities carried out by Crédit Agricole CIB
with these counterparties, which are mainly based on debt-related businesses and include
lending, as well as, trading and distribution of capital markets products such as
derivatives, repurchase and securities lending transactions, debt instruments and
structured transactions and any settlement activities in relation to the above.
|
| ― |
Financial risks: risk of losses on market positions arising from
changes in various
financial markets (interest rates, equities and commodity prices, credit spreads,
currency effect and volatility), as well as the risk of not having the necessary resources
to meet commitments (liquidity risk). Market risk arises particularly in connection
with the offer of investment products and services to corporate customers and financial
institutions as well as market making activity for certain market segments and activities.
|
| ― |
Operational risks and related risks: risk of losses resulting
primarily from the unsuitability
or failure of processes, systems or people in charge of transaction processing, as
well as risks relating to external events such as floods, fires, windstorms, earthquakes
or terrorist attacks.
|
Related risks include legal and compliance risk arising from Crédit Agricole CIB's
exposure to civil or criminal proceedings, non-compliance risk relating to failure
to comply with regulations and legislation governing Crédit Agricole CIB's banking
and financial activities, and related reputational risk that may arise in cases of
non-compliance with legal or regulatory obligations, or with ethical standards.
| ― |
Other risks relating to Crédit Agricole CIB's activities: includes
risks relating
to the bank's strategy and competition.
|
The remainder of this part of the registration document discusses each of the categories
of risks discussed above as applied to Crédit Agricole CIB's activities, indicating
(to the extent applicable) where quantitative information relating to such risks can
be found in this document.
Within each category, the risks that Crédit Agricole CIB currently considers to
be
most significant, based on an assessment of likelihood of occurrence and potential
impact, are presented first. However, even a risk that is currently considered to
be less important could have a significant impact on Crédit Agricole CIB if it were
to materialise in the future.
B. RISKS RELATING
TO THE ENVIRONMENT IN WHICH CRÉDIT AGRICOLE CIB OPERATES
Adverse economic and financial conditions have in the past had and may in the future
have an impact on the Crédit Agricole CIB and the markets in which it operates.
The businesses of Crédit Agricole CIB are sensitive to changes in the financial
markets
and more generally to economic conditions in France, Europe and the rest of the world.
In the year ended 31 December 2018, 40% of Crédit Agricole CIB's revenues were generated
in France, 20% in Europe (excluding France), 15% in North America and 11% in Asia
and Oceania (excluding Japan). A deterioration in economic conditions in the markets
where the Crédit Agricole CIB operates could have some or all of the following impacts:
| ― |
Adverse economic conditions could affect the business and operations
of customers,
resulting in an increased rate of default on loans and receivables as well as other
products traded with customers.
|
| ― |
A decline in market prices of bonds, shares and commodities could
impact many of the
businesses of the Crédit Agricole CIB.
|
| ― |
Macro-economic policies adopted in response to actual or anticipated
economic conditions
could have unintended effects, and are likely to impact market parameters such as
interest rates and foreign exchange rates, which in turn could affect the businesses
of the Crédit Agricole CIB that are most exposed to market risk.
|
| ― |
Perceived favourable economic conditions generally or in specific
business sectors
could result in asset price bubbles, which could in turn exacerbate the impact of
corrections when conditions become less favourable.
|
| ― |
A significant economic disruption (such as the global financial
crisis of 2008 or
the European sovereign debt crisis of 2011) could have a severe impact on all of the
activities of the Crédit Agricole CIB, particularly if the disruption is characterised
by an absence of market liquidity that makes it difficult to sell certain categories
of assets at their estimated market value or at all.
|
European markets may be affected by a number of factors, including continuing uncertainty
resulting from the decision of the United Kingdom to leave the European Union, political
activism in France, uncertain political and economic conditions in Italy and leadership
changes in Germany. Markets in the United States may be affected by factors such as
trade policy or a tendency towards political stalemate, which has resulted in government
shutdowns and affected credit and currency markets globally. Asian markets could be
impacted by factors such as slower than expected economic growth rates in China or
by geopolitical tensions on the Korean peninsula. Share prices have recently experienced
significant volatility and could fall if economic conditions deteriorate, or if the
market perceives that they are likely to deteriorate. Credit markets and the value
of fixed income assets could be adversely affected if interest rates were to rise
as the European Central Bank, the Federal Reserve Bank and other central banks continue
to scale back the extraordinary support measures they put in place in response to
recent adverse economic conditions. The price of oil has been particularly volatile
in recent months, and could be impacted by unpredictable geopolitical factors in regions
such as the Middle East and Russia.
More generally, increased volatility of financial markets could adversely affect
Crédit
Agricole CIB's trading and investment positions in the debt, currency, commodity and
equity markets, as well as its positions in other investments. Severe market disruptions
and extreme market volatility have occurred in recent years and may occur again in
the future, which could result in significant losses for Crédit Agricole CIB. Such
losses may extend to a broad range of trading and hedging products, including swaps,
forward and future contracts, options and structured products. Volatility of financial
markets makes it difficult to predict trends and implement effective trading strategies.
It is difficult to predict when economic or market downturns will occur, and which
markets will be most significantly impacted. If economic or market conditions in France
or elsewhere in Europe, or global markets more generally, were to deteriorate or become
more volatile, Crédit Agricole CIB's operations could be disrupted, and its business,
results of operations and financial condition could be adversely affected.
Crédit Agricole
CIB's profitability and financial condition may be impacted by either
the continuation or the end of the current low interest rate environment.
In recent years, global markets have been characterised by low interest rates.
If
the low interest rate environment continues, Crédit Agricole CIB's profitability may
be affected. During periods of low interest rates, interest rate spreads tend to tighten,
and Crédit Agricole CIB may be unable to lower funding costs sufficiently to offset
reduced income from lending at lower market interest rates. An environment of persistently
low interest rates can have the effect of flattening the yield curve in the market
more generally, which could reduce the premiums generated by Crédit Agricole CIB and
its affiliates from their funding activities and negatively affect their profitability
and financial condition. A flattening yield curve can also influence financial institutions
to engage in riskier activities in an effort to earn the desired level of returns,
which can increase overall market risk and volatility.
On the other hand, the end of a period of prolonged low interest rates carries
risks.
In this respect, the U.S. Federal Reserve has increased interest rates in recent months
(although it recently announced it would pause its policy of interest rate increases),
and the ECB ended its asset purchase programme in December 2018 (although it recently
announced it would maintain its interest rate guidance and interest rates would stay
at current levels through the summer of 2019). If market interest rates were to rise,
a portfolio featuring significant amounts of lower interest loans and fixed income
assets as a result of an extended period of low interest rates would be expected to
decline in value. If Crédit Agricole CIB's hedging strategies are ineffective or provide
only a partial hedge against such a change in value, Crédit Agricole CIB could incur
losses. Moreover, any rate increase that is sharper or more rapid than expected could
threaten economic growth in the European Union, the United States and elsewhere. On
the lending side, this could cause stress in loan and bond portfolios possibly leading
to an increase in non-performing exposures and defaults. More generally, the ending
of accommodative monetary policies may lead to severe corrections in certain markets
or assets (e.g., non-investment grade corporate and sovereign borrowers, certain sectors
of equities and real estate) that particularly benefitted from the prolonged low interest
rate and high liquidity environment, and such corrections could potentially be contagious
to financial markets generally, including through substantially increased volatility.
Crédit Agricole
CIB operates in a highly regulated environment, and its profitability
and financial condition could be significantly impacted by ongoing legislative and
regulatory changes.
A variety of regulatory and supervisory regimes apply to Crédit Agricole CIB and
its
subsidiaries in each of the jurisdictions in which they operate. Non-compliance with
such regimes could lead to significant intervention by regulatory authorities and
fines, public reprimand, reputational damage, enforced suspension of operations or,
in extreme cases, withdrawal of authorisation to operate. In addition, Crédit Agricole
CIB's ability to expand its business or to pursue certain existing activities may
be limited by regulatory constraints.
Legislation and regulations have recently been enacted or proposed with a view
to
introducing a number of changes, some permanent, in the global financial environment.
While the objective of these measures is to avoid a recurrence of the global financial
crisis, the new measures have changed substantially, and may continue to change, the
environment in which Crédit Agricole CIB and other financial institutions operate.
The measures that have been or may be adopted include more stringent capital and
liquidity
requirements (particularly for large global institutions and groups such as the Crédit
Agricole Group), taxes on financial transactions, limits or taxes on employee compensation
over specified levels, limits on the types of activities that commercial banks can
undertake (particularly proprietary trading and investment and ownership in private
equity funds and hedge funds), ring-fencing requirements relating to certain activities,
restrictions on the types of entities permitted to conduct swaps activities, restrictions
on certain types of activities or financial products such as derivatives, mandatory
write-downs or conversions into equity of certain debt instruments, enhanced recovery
and resolution regimes, revised risk-weighting methodologies, periodic stress testing
and the creation of new and strengthened regulatory bodies. Some of the new measures
adopted after the financial crisis are already the subject of proposed modifications,
impacting the predictability of the regulatory regimes to which Crédit Agricole CIB
is subject.
As a result of some of these measures, Crédit Agricole CIB has reduced the scope
of
certain activities in order to allow it to comply with the new requirements, particularly
in the area of wealth management. These measures have also increased compliance costs
and are likely to continue to do so.
C. CREDIT AND
COUNTERPARTY RISKS
Crédit Agricole
CIB is exposed to the credit risk of other parties.
Crédit Agricole CIB is exposed to the creditworthiness of its customers and counterparties.
Credit risk impacts Crédit Agricole CIB's consolidated financial statements when a
counterparty is unable to honour its obligations and when the book value of these
obligations in the bank's records is positive. The counterparty may be a bank, a financial
institution, an industrial or commercial enterprise, a government and its various
entities, an investment fund or a natural person. If the level of counterparty defaults
increases compared to recent historically low levels, Crédit Agricole CIB may have
to record significant charges for possible bad and doubtful debts, affecting its profitability.
While Crédit Agricole CIB seeks to reduce its exposure to credit risk by using
risk
mitigation techniques such as collateralisation, obtaining guarantees or entering
into credit derivatives and netting agreements, it cannot be certain that these techniques
will be effective to offset losses resulting from counterparty defaults that are covered
by these techniques. Moreover, Crédit Agricole CIB is exposed to the risk of default
by the party providing the credit risk coverage (such as a counterparty on a derivative
trade) or to the risk of loss of value of any collateral. In addition, only a portion
of Crédit Agricole CIB's overall credit risk is covered by these techniques. Accordingly,
Crédit Agricole CIB has significant exposure to the risk of counterparty default.
A deterioration
in the quality of corporate debt obligations could adversely impact
Crédit Agricole CIB's results of operations.
The credit quality of corporate obligors has started to experience a significant
deterioration
in recent months, resulting primarily from increased economic uncertainty and, in
certain sectors, the risks associated with trade policies of major economic powers.
The risks are exacerbated by the recent practice by which lending institutions have
reduced the level of covenant protection in their loan documentation, making it more
difficult for lenders to intervene at an early stage to protect assets and limit the
risk of default. If the current trends towards deterioration in credit quality continue,
Crédit Agricole CIB may be required to record asset impairment charges or to mark
down the value of its corporate debt portfolio, which would in turn impact Crédit
Agricole CIB's profitability and financial condition.
[Please see paragraph [2.4 of this chapter] for quantitative information on the
credit
quality of Crédit Agricole CIB's portfolios.]
The soundness
and conduct of other financial institutions and market participants
could adversely affect Crédit Agricole CIB.
Crédit Agricole CIB's ability to engage in funding, investment and derivatives
transactions
could be adversely affected by the soundness of other financial institutions or market
participants. Financial services institutions are interrelated as a result of trading,
clearing, counterparty, funding or other relationships. As a result, defaults by,
or even rumours or questions about, one or more financial services institutions, or
the loss of confidence in the financial services industry generally, may lead to market-wide
liquidity contractions and could lead to further losses or defaults. Crédit Agricole
CIB has exposure to many counterparties in the financial industry, including brokers
and dealers, commercial banks, investment banks, mutual and hedge funds, and other
institutional clients with which it regularly executes transactions. Many of these
transactions expose Crédit Agricole CIB to credit risk in the event of default or
financial distress. In addition, Crédit Agricole CIB's credit risk may be exacerbated
when the collateral held by it cannot be liquidated or is liquidated at prices not
sufficient to recover the full amount of the loan or derivative exposure due to it.
[Please see note [3.1.3](chapter 6) to the consolidated financial statements for
quantitative
information on Crédit Agricole CIB's exposure to credit institutions.]
Crédit Agricole
CIB may be adversely affected by events impacting sectors to which
it has significant exposure.
Crédit Agricole CIB is subject to the risk that certain events may have a disproportionately
large impact on a particular industrial sector to which Crédit Agricole CIB is significantly
exposed. As of 31 December 2018, 81% of Crédit Agricole CIB's financing and guarantee
commitments were made with "Large Companies" and 15% with "credit institutions". If
these or other sectors that represent a significant share of Crédit Agricole CIB's
portfolio were to experience adverse conditions, Crédit Agricole CIB's profitability
and financial condition could be adversely affected.
[Please see paragraph [2.4.6 of this chapter] for quantitative information on the
sectors represented in Crédit Agricole CIB's commercial lending portfolio.
Crédit Agricole
CIB is exposed to country risk and may be vulnerable to concentrated
counterparty risk in certain countries where it operates.
Crédit Agricole CIB is subject to country risk, meaning the risk that economic,
financial,
political or social conditions in a given country in which it operates will affect
its financial interests. Crédit Agricole CIB monitors country risk and takes it into
account in the fair value adjustments and cost of risk recorded in its financial statements.
However, a significant change in political or macroeconomic environments may require
it to record additional charges or to incur losses beyond the amounts previously written
down in its financial statements. As of 31 December 2018, 28% of the Crédit Agricole
CIB's financing and guarantee commitments was represented by counterparts in France,
28% by counterparts in the other EU countries and 21% in North America. Adverse conditions
that particularly affect these countries would have a significant impact on Crédit
Agricole CIB. In addition, Crédit Agricole CIB has significant exposures in countries
outside the OECD, which are subject to risks that include political instability, unpredictable
regulation and taxation, expropriation and other risks that are less present in more
developed economies.
[Please see paragraphs [2.4.6 of this chapter] for quantitative information relating
to Crédit Agricole CIB's geographical exposures.]
Any significant
increase in charges for loan losses or changes in Crédit Agricole
CIB's estimate of the risk of loss in its loan and receivables portfolio could adversely
affect its results of operations and financial condition.
In connection with its lending activities, Crédit Agricole CIB periodically establishes
asset impairment charges, whenever necessary, to reflect actual or potential losses
in respect of its loan and receivables portfolio, which are recorded in its profit
and loss account under "cost of risk". Crédit Agricole CIB's overall level of such
asset-impairment charges is based upon its assessment of prior loss experience, the
volume and type of lending being conducted, industry standards, past due loans, economic
conditions and other factors related to the recoverability of various loans, or scenario-based
statistical methods applicable collectively to all relevant assets. Although Crédit
Agricole CIB seeks to establish an appropriate level of asset-impairment charges,
its lending businesses may cause it to have to increase their charges for loan losses
in the future as a result of increases in non-performing assets or for other reasons,
such as deteriorating market conditions or factors affecting particular countries
or industry sectors. Any significant increase in charges for loan losses or a significant
change in Crédit Agricole CIB's estimate of the risk of loss inherent in its portfolio
of non-impaired loans, as well as the occurrence of loan losses in excess of the charges
recorded with respect thereto, could have an adverse effect on Crédit Agricole CIB's
results of operations and financial condition.
Crédit Agricole
CIB is subject to counterparty risk in connection with its market
activities.
Crédit Agricole CIB could incur losses from counterparty defaults in connection
with
its securities, foreign exchange, commodities and other market activities. When Crédit
Agricole CIB holds portfolios of debt securities, including in connection with its
market-making activities, it is subject to the risk of a deterioration in the credit
quality of the issuer, or of a default in payment. In connection with its trading
activities, Crédit Agricole CIB is at risk in case a counterparty fails to perform
its obligations to settle trades. Crédit Agricole CIB's derivatives activities are
also subject to the risk of counterparty default, as well as significant uncertainties
relating to the amounts due in connection with a default. While Crédit Agricole CIB
often obtains collateral or uses setoff rights to address these risks, these may not
be sufficient to protect it fully, and Crédit Agricole CIB may suffer significant
losses as a result of defaults by major counterparties.
D. FINANCIAL RISKS
Crédit Agricole
CIB is exposed to risks associated with changes in market prices and
volatility with respect to a wide number of financial markets.
Crédit Agricole CIB's businesses are materially affected by conditions in the financial
markets, which in turn are impacted by current and anticipated future economic conditions
in France, Europe and in the other locations around the world where Crédit Agricole
CIB operates. Adverse changes in market, economic or geopolitical conditions could
create a challenging operating environment for financial institutions. In particular,
the risks to which Crédit Agricole CIB is exposed include fluctuations in interest
rates, securities prices, foreign exchange rates, the specific yield premium on bond
issuances and the prices of oil, precious metals and other commodities.
Crédit Agricole CIB uses a "value at risk" (VaR) model, which represents the potential
future loss with a 99% confidence interval, to quantify its exposure to potential
losses from market risks, and also performs stress testing with a view to quantifying
its potential exposure in extreme scenarios, as described and quantified in paragraphs
[2.4.2 of this chapter]. However, these techniques rely on statistical methodologies
based on historical observations, which may turn out to be unreliable indicators of
future market conditions. Accordingly, Crédit Agricole CIB's exposure to market risk
in extreme scenarios could be greater than the exposures predicted by its quantification
techniques.
Significant interest
rate changes could adversely affect Crédit Agricole CIB's consolidated
revenues or profitability.
The amount of net interest income earned by Crédit Agricole CIB during any given
period
significantly affects its overall consolidated revenues and profitability for that
period. Interest rates are highly sensitive to many factors beyond Crédit Agricole
CIB's control. Changes in market interest rates could affect the interest rates charged
on interest-earning assets differently than the interest rates paid on interest-bearing
liabilities. Any adverse change in the yield curve could cause a decline in Crédit
Agricole CIB's net interest income from its lending activities. In addition, increases
in the interest rates at which short-term funding is available and maturity mismatches
may adversely affect Crédit Agricole CIB's profitability.
Crédit Agricole
CIB's hedging strategies may not prevent losses.
If any of the variety of instruments and strategies that Crédit Agricole CIB uses
to hedge its exposure to various types of risk in its businesses are not effective,
Crédit Agricole CIB may incur losses. Many of its strategies are based on historical
trading patterns and correlations. For example, if Crédit Agricole CIB holds a long
position in an asset, it may hedge that position by taking a short position in an
asset where the short position has historically moved in a direction that would offset
a change in the value of the long position. Crédit Agricole CIB may only be partially
hedged, however, or these strategies may not be fully effective in mitigating its
risk exposure in all market environments or against all types of risk in the future.
Unexpected market developments may also reduce the effectiveness of Crédit Agricole
CIB's hedging strategies. In addition, the manner in which gains and losses resulting
from certain ineffective hedges are recorded may result in additional volatility in
Crédit Agricole CIB's reported earnings.
Crédit Agricole
CIB may generate lower revenues during market downturns.
Financial and economic conditions affect the number and size of transactions for
which
Crédit Agricole CIB provides securities underwriting, financial advisory and other
investment banking services. Crédit Agricole CIB's revenues, which include fees from
these services, are directly related to the number and size of the transactions in
which it participates and can thus be significantly affected by market downturns.
Adjustments to
the carrying value of Crédit Agricole CIB's securities and derivatives
portfolios and Crédit Agricole CIB's own debt could have an impact on its net income
and shareholders' equity.
The carrying value of Crédit Agricole CIB's securities and derivatives portfolios
and certain other assets, as well as its own debt, in its balance sheet is adjusted
as of each financial statement date. The valuation adjustments include a component
that reflects the credit risk inherent in Crédit Agricole CIB's own debt. Most of
the adjustments are made on the basis of changes in fair value of the assets or liabilities
during an accounting period, with the changes recorded either in the income statement
or directly in shareholders' equity. Changes that are recorded in the income statement,
to the extent not offset by opposite changes in the fair value of other assets, affect
its consolidated revenues. All fair value adjustments affect shareholders' equity
and, as a result, its capital adequacy ratios. The fact that fair value adjustments
are recorded in one accounting period does not mean that further adjustments will
not be necessary in subsequent periods.
Crédit Agricole
CIB may suffer losses in connection with its holdings of equity securities.
Equity securities held by Crédit Agricole CIB could decline in value, causing Crédit
Agricole CIB to record losses. Crédit Agricole CIB bears the risk of a decline in
value of equity securities in connection with its market-making and trading activities,
mainly with respect to listed equity securities, in its private equity business, and
in connection with transactions in which it acquires strategic participations in a
company with a view to exercising control and influencing the management policies
of the issuer. In the case of strategic participations, Crédit Agricole CIB's degree
of control may be limited, and any disagreement with other shareholders or with management
may adversely impact the ability of Crédit Agricole CIB to influence the policies
of the relevant company. If Crédit Agricole CIB's equity securities decline in value
significantly, Crédit Agricole CIB may be required to record fair value adjustments
or asset impairment charges in its consolidated financial statements, which could
negatively impact its results of operations and financial condition.
Protracted market
declines can reduce liquidity in the markets, making it harder to
sell assets and possibly leading to material losses.
In some of Crédit Agricole CIB's businesses, protracted market movements, particularly
asset price declines, can reduce the level of activity in the market or reduce market
liquidity. These developments can lead to material losses if Crédit Agricole CIB cannot
close-out deteriorating positions in a timely way. This may especially be the case
for assets Crédit Agricole CIB holds for which there are not very liquid markets to
begin with. Assets that are not traded on stock exchanges or other public trading
markets, such as derivatives contracts between banks, may have values that Crédit
Agricole CIB calculates using models other than publicly-quoted prices. Monitoring
the deterioration of prices of assets like these is difficult and could lead to losses
that Crédit Agricole CIB did not anticipate.
Crédit Agricole
CIB must ensure that its assets and liabilities properly match in
order to avoid exposure to losses.
Crédit Agricole CIB is exposed to the risk that the maturity, interest rate or
currencies
of its assets might not match those of its liabilities. The timing of payments on
many of Crédit Agricole CIB's assets is uncertain, and if Crédit Agricole CIB receives
lower revenues than expected at a given time, it might require additional funding
in order to meet its obligations on its liabilities. While Crédit Agricole CIB imposes
strict limits on the gaps between its assets and its liabilities as part of its risk
management procedures, it cannot be certain that these limits will be fully effective
to eliminate potential losses arising from asset and liability mismatches.
[Please see paragraph [2.6 of this chapter] for quantitative information relating
to liquidity risk and asset and liability management.]
E. OPERATIONAL
RISKS AND RELATED RISKS
Crédit Agricole
CIB's risk management policies, procedures and methods may leave it
exposed to unidentified or unanticipated risks, which could lead to material losses.
Crédit Agricole CIB's risk management techniques and strategies may not be fully
effective
in mitigating its risk exposure in all types of market environments or against all
types of risk, including risks that it fails to identify or anticipate. Furthermore,
the risk management procedures and policies used by Crédit Agricole CIB do not guarantee
effective risk reduction in all market configurations. These procedures may not be
effective against certain risks, particularly those that Crédit Agricole CIB has not
previously identified or anticipated. Some of the qualitative tools and metrics used
by Crédit Agricole CIB for managing risk are based upon its use of observed historical
market behaviour. It applies statistical and other tools to these observations to
assess its risk exposures. These tools and metrics may fail to predict future risk
exposures. These risk exposures could, for example, arise from factors it did not
anticipate or correctly evaluate in its statistical models or from unprecedented market
movements. This would limit its ability to manage its risks and affect its results.
Crédit Agricole CIB's losses could therefore be significantly greater than those anticipated
based on historical measures. In addition, certain of the processes that Crédit Agricole
CIB uses to estimate risk exposure are based on subjective and complex judgments that
could lead to assessments that prove inaccurate. While no material issue has been
identified to date, risk management systems are also subject to the risk of operational
failure, including fraud.
Future events
may be different from those reflected in the management assumptions
and estimates used in the preparation of Crédit Agricole CIB's financial statements,
which may cause unexpected losses in the future.
Pursuant to IFRS rules and interpretations in effect as of the date of this Registration
Document, Crédit Agricole CIB is required to use certain estimates in preparing its
financial statements, including accounting estimates to determine loan loss impairment
charges, reserves related to future litigation, and the fair value of certain assets
and liabilities, among other items. Should Crédit Agricole CIB's determined values
for such items prove substantially inaccurate, or if the methods by which such values
were determined are revised in future IFRS rules or interpretations, Crédit Agricole
CIB may experience unexpected losses.
Crédit Agricole
CIB is exposed to risks related to the security and reliability of
its information systems and those of third parties.
Crédit Agricole CIB is subject to cyber risk, which is the risk caused by a malicious
and/or fraudulent act, perpetrated digitally in an effort to manipulate data (personal,
banking, technical or strategic data), processes and users, with the aim of causing
material losses to companies, their employees, partners and customers. Cyber risk
has become a top priority in the field of operational risks. A company's data assets
are exposed to new, complex and evolving threats, which could have material financial
and reputational impacts on all companies, and specifically those in the banking sector.
Given the increasing sophistication of criminal enterprises behind cyber-attacks,
regulatory and supervisory authorities have begun highlighting the importance of risk
management in this area.
As with most other banks, Crédit Agricole CIB relies heavily on communications
and
information systems to conduct its business. Any failure or interruption or breach
in security of these systems could result in failures or interruptions in its customer
relationship management, general ledger, deposit, servicing, financing and capital
market operations. If, for example, Crédit Agricole CIB's information systems failed,
even for a short period of time, it would be unable to serve in a timely manner certain
customers' needs and could thus lose their business. Likewise, a temporary shutdown
of its information systems, even though it has back-up recovery systems and contingency
plans, could result in considerable costs required for information retrieval and verification.
Crédit Agricole CIB cannot provide assurances that such failures or interruptions
will not occur or, if they do occur, that they will be adequately addressed. The occurrence
of any failures or interruptions could have a material adverse effect on its financial
condition and results of operations.
Crédit Agricole CIB is also exposed to the risk of an operational failure or interruption
of one of its clearing agents, foreign exchange markets, clearing houses, custodians
or other financial intermediaries or external service providers that it uses to execute
or facilitate its securities transactions. As its interconnectivity with its customers
grows, Crédit Agricole CIB may also become increasingly exposed to the risk of operational
failure of its customers' information systems. Crédit Agricole CIB's communications
and information systems, and those of its customers, service providers and counterparties,
may also be subject to malfunctions or interruptions resulting from cybercrime or
cyber terrorism. Crédit Agricole CIB cannot guarantee that malfunctions or interruptions
in its systems or in those of other parties will not occur or, if they do occur, that
they will be adequately resolved.
Crédit Agricole
CIB is exposed to the risk of paying significant damages or fines
as a result of legal, arbitration or regulatory proceedings.
Crédit Agricole CIB and its affiliates have in the past been, and may in the future
be, subject to significant legal proceedings (including class action lawsuits), arbitrations
and regulatory proceedings. When determined adversely to Crédit Agricole CIB, these
proceedings can result in significant awards of damages, fines and penalties. Legal
and regulatory proceedings to which Crédit Agricole CIB has been subject involve issues
such as collusion with respect to the manipulation of market benchmarks, violation
of international sanctions, inadequate controls and other matters. While Crédit Agricole
CIB, in many cases, has substantial defences, even where the outcome of a legal or
regulatory proceeding is favourable, Crédit Agricole CIB may incur substantial costs
and have to devote substantial resources to the defending its interests.
[Please see [paragraph 2.8 (Litigation and exceptional events) of this chapter]
for
information regarding ongoing judicial, arbitration and regulatory proceedings to
which Crédit Agricole CIB is subject.]
The international
scope of Crédit Agricole CIB's operations exposes it to legal and
compliance risks.
The international scope of Crédit Agricole CIB's operations exposes it to risks
inherent
in foreign operations, including the need to comply with multiple and often complex
laws and regulations applicable to activities in each of the countries involved, such
as local banking laws and regulations, internal control and disclosure requirements,
data privacy restrictions, European, U.S. and local antimoney laundering and anticorruption
laws and regulations, international sanctions and other rules and requirements. Violations
of these laws and regulations could harm the reputation of Crédit Agricole CIB, result
in litigation, civil or criminal penalties, or otherwise have a material adverse effect
on its business.
Despite the implementation and improvement of procedures designed to ensure compliance
with these laws and regulations, there can be no assurance that all employees or contractors
of Crédit Agricole CIB will follow its policies or that such programs will be adequate
to prevent all violations. It cannot be excluded that transactions in violation of
Crédit Agricole CIB's policies may be identified, potentially resulting in penalties.
Crédit Agricole CIB does not have direct or indirect majority voting control in certain
entities with international operations, and in those cases its ability to require
compliance with its policies and procedures may be even more limited.
Damage to Crédit
Agricole CIB's reputation could have a negative impact on Crédit
Agricole CIB's business.
Crédit Agricole CIB's business depends in large part on the maintenance of a strong
reputation for compliance and ethical behaviour. If Crédit Agricole CIB were to become
subject to legal proceedings or adverse publicity relating to compliance or similar
issues, Crédit Agricole CIB's reputation could be affected, resulting in an adverse
impact on its business. These issues include inappropriately dealing with potential
conflicts of interest, legal and regulatory requirements, competition issues, ethical
issues, money laundering laws, information security policies and sales and trading
practices. Crédit Agricole CIB's reputation could also be damaged by an employee's
misconduct, or fraud or embezzlement by financial intermediaries. Any damage to Crédit
Agricole CIB's reputation might lead to a loss of business that could impact its earnings
and financial position. Failure to address these issues adequately could also give
rise to additional legal risk, which might increase the number of litigation claims
and expose Crédit Agricole CIB to fines or regulatory sanctions.
F. OTHER RISKS
RELATED TO CRÉDIT AGRICOLE CIB'S ACTIVITIES
Crédit Agricole
CIB may not reach the targets in its Medium-Term Plan.
On March 9, 2016, the Crédit Agricole Group announced its mediumterm plan, Strategic
Ambition 2020 (the "MediumTerm Plan"). The MediumTerm Plan contemplates a number of
initiatives, including a business customer strategy for Crédit Agricole CIB focused
on (i) reinforcing the weight of financial institutions, (ii) maintaining leadership
in structured finance, (iii) strengthening the support to the development of the mid-corp
segment and (iv) focusing selectively on growth in the corporate sector.
The Medium-Term Plan includes a number of financial targets relating to revenues,
expenses, net income and capital adequacy ratios, among other things. These financial
targets were established primarily for purposes of internal planning and allocation
of resources, and are based on a number of assumptions with regard to business and
economic conditions. The financial targets do not constitute projections or forecasts
of anticipated results. The actual results of Crédit Agricole CIB are likely to vary
(and could vary significantly) from these targets for a number of reasons, including
the occurence of one or more of the risk factors described elsewhere in this section.
The plan's success depends on a very large number of initiatives (both significant
and modest in scope) within different Crédit Agricole CIB business lines. While many
of these could be successful, it is unlikely that all targets will be met, and it
is not possible to predict which objectives will and will not be achieved. The Medium
Term Plan also contemplates significant investments, but if the objectives of the
plan are not met, the return on these investments will be less than expected.
If Crédit Agricole CIB does not meet the targets of its Medium Term Plan, its financial
condition and results of operations could be adversely affected.
Adverse events
may affect several of Crédit Agricole CIB's businesses simultaneously.
While each of Crédit Agricole CIB's principal activities are subject to risks specific
to them and are subject to different market cycles, it is possible that adverse events
could affect several of Crédit Agricole CIB's activities at the same time. In such
event, Crédit Agricole CIB might not achieve the benefits that it otherwise would
hope to do through the diversification of its activities. For example, adverse macroeconomic
conditions could impact Crédit Agricole CIB in multiple ways, by increasing default
risk in its lending activities, causing a decline in the value of its securities portfolios
and reducing revenues in Crédit Agricole CIB's commission-generating activities. Where
an event adversely affects multiple activities, the impact on Crédit Agricole CIB's
results of operations and financial condition could be particularly significant.
Crédit Agricole
CIB is subject to risks associated with climate change.
While Crédit Agricole CIB's activities generally are not exposed directly to climate
change risks, Crédit Agricole CIB is subject to a number of indirect risks that could
be significant. When Crédit Agricole CIB lends to businesses that conduct activities
that produce significant quantities of greenhouse gases, Crédit Agricole CIB is subject
to the risk that more stringent regulations or limitations on the borrower's activities
may adversely impact its credit quality, causing Crédit Agricole CIB to suffer losses
on its loan portfolio. Crédit Agricole CIB also conducts activities relating to trading
of emissions allowances, and it could suffer losses due to adverse movements in prices
for such allowances. As the transition to a more stringent climate change environment
accelerates, Crédit Agricole CIB will have to adapt its activities appropriately in
order to achieve its strategic objectives and to avoid suffering losses.
Crédit Agricole
CIB must maintain high credit ratings, or its business and profitability
could be adversely affected.
Credit ratings have a significant impact on the liquidity of Crédit Agricole CIB.
A downgrade in credit ratings could adversely affect the liquidity and competitive
position of Crédit Agricole CIB, increase borrowing costs, limit access to the capital
markets, trigger obligations in Crédit Agricole CIB's covered bond program or under
certain bilateral provisions in some trading, derivative and collateralised financing
contracts or adversely affect the market value of its Notes.
Crédit Agricole CIB's cost of obtaining long-term unsecured funding from market
investors
is directly related to its credit spreads (the amount in excess of the interest rate
of government securities of the same maturity that is paid to debt investors), which
in turn depend to a certain extent on their credit ratings. Increases in credit spreads
can significantly increase Crédit Agricole CIB's cost of funding. Changes in credit
spreads are continuous, market-driven, and subject at times to unpredictable and highly
volatile movements. Credit spreads are also influenced by market perceptions of issuer
creditworthiness. In addition, credit spreads may be influenced by movements in the
cost to purchasers of credit default swaps referenced to Crédit Agricole CIB's debt
obligations, which are influenced both by the credit quality of those obligations
and by a number of market factors that are beyond the control of Crédit Agricole CIB.
Crédit Agricole
CIB faces intense competition.
Crédit Agricole CIB faces intense competition in all financial services markets
and
for the products and services it offers. The European financial services markets are
relatively mature, and the demand for financial services products is, to some extent,
related to overall economic development. Competition in this environment is based
on many factors, including the products and services offered, pricing, distribution
systems, customer service, brand recognition, perceived financial strength and the
willingness to use capital to serve client needs.
In addition, new and more competitive rivals (including those utilising innovative
technology solutions), which may be subject to separate or more flexible regulation,
or other requirements relating to prudential ratios, could also enter the market.
Technological advances and the growth of e-commerce have made it possible for non-bank
institutions to offer products and services that traditionally were banking products,
and for financial institutions and other companies to provide electronic and Internet-based
financial solutions, including electronic securities trading. These new players exert
downward price pressure on Crédit Agricole CIB's products and services and can succeed
in winning market share in areas that have been historically stable and dominated
by traditional financial institutions. In addition, new applications, particularly
in payment processing and retail banking, new currencies, such as bitcoin, and new
technologies facilitating transaction processing, such as blockchain, have been gradually
transforming the financial sector and the ways in which customers consume banking
services. It is difficult to predict the effects of the emergence of such new technologies,
the regulatory framework for which is still being defined, but their increased use
may transform the competitive landscape of the banking and financial industry. Crédit
Agricole CIB must therefore strive to maintain its competitiveness in France and in
the other major markets in which it operates by adapting its systems and strengthening
its technological footprint to maintain its current market share and level of results.
Crédit Agricole
CIB's ability to attract and retain qualified employees is critical
to the success of its business and failure to do so may materially affect its performance.
Crédit Agricole CIB's employees are its most important resource and, in many areas
of the financial services industry, competition for qualified personnel is intense.
Crédit Agricole CIB's results depend on its ability to attract new employees and to
retain and motivate its existing employees. Crédit Agricole CIB's ability to attract
and retain qualified employees could potentially be impaired by legislative and regulatory
restrictions on employee compensation in the financial services industry. Changes
in the business environment may cause Crédit Agricole CIB to move employees from one
business to another or to reduce the number of employees in certain of its businesses.
This may cause temporary disruptions as employees adapt to new roles and may reduce
Crédit Agricole CIB's ability to take advantage of improvements in the business environment.
In addition, current and future laws (including laws relating to immigration and outsourcing)
may restrict Crédit Agricole CIB's ability to move responsibilities or personnel from
one jurisdiction to another. This may impact its ability to take advantage of business
opportunities or potential efficiencies.
Statutory write
down or conversion powers under EU and French laws relating to bank
recovery and resolution may adversely affect holders of securities issued by the Crédit
Agricole Group
The European Bank Resolution and Recovery Directive ("BRRD") and the single resolution
mechanism ("Single Resolution Mechanism"), as transposed into French law by a decree-law
dated 20 August 2015 (l'ordonnance n°2015-1024 du 20 août 2015 portant diverses dispositions
d'adaptation de la legislation au droit de l'Union Européenne en matière financière),
each of which is the subject of pending modification proposals at the European level,
provide resolution authorities with the power to "bail in" capital instruments and
eligible liabilities of an issuing institution such as Crédit Agricole CIB, meaning
writing them down or (except in the case of shares) converting them to equity or other
instruments, if resolution proceedings are initiated in respect of the issuing institution.
As a general matter, a resolution procedure may be initiated in respect of an institution
if (i) it or the group to which it belongs is failing or likely to fail, (ii) there
is no reasonable prospect that another measure would avoid such failure within a reasonable
time period, and (iii) a resolution measure is required (a) to ensure the continuity
of critical functions, (b) to avoid a significant adverse effect on the financial
system, (c) to protect public funds by minimising reliance on extraordinary public
financial support, and (d) to protect client funds and assets, in particular those
of depositors.
If an issuing institution is failing or likely to fail (and there is no reasonable
prospect that another measure would avoid such failure within a reasonable time period)
or if the issuing institution or the group to which it belongs requires extraordinary
public support, resolution authorities must write down capital instruments such as
shares or convert such instruments (excluding shares) into equity before initiating
resolution procedure. If such a resolution procedure is commenced thereafter, the
resolution authority may decide to exercise the bail-in power in respect of any remaining
capital instruments (i.e., capital instruments (including shares) whose nominal amount
has not been fully written down or capital instruments (excluding shares) that have
not been converted to equity at the beginning of a resolution procedure), as well
as other eligible liabilities issued by the relevant institution (i.e., subordinated
debt instruments, senior non-preferred debt instruments and finally senior preferred
debt instruments) in reverse order of seniority, excluding certain limited categories
of liabilities.
As the Central Body of the Crédit Agricole Network (which includes primarily Crédit
Agricole S.A., the Regional Banks, the Local Banks and Crédit Agricole CIB and BforBank,
as affiliated members (the "Crédit Agricole Network")), Crédit Agricole S.A. must
implement the financial solidarity mechanism provided for in Article L.511-31 of the
French Code monétaire et financier in order to mobilise the equity of the affiliated
members of the Crédit Agricole Network to maintain the liquidity and solvency of both
the Crédit Agricole Network and each of its members, including Crédit Agricole CIB.
If those measures prove insufficient, and the conditions related to the commencement
of a resolution procedure as described above are met, the resolution authority's exercise
of its resolution powers could result in the write-down or full or partial conversion
of capital instruments and eligible liabilities issued by Crédit Agricole S.A..
In addition, the BRRD provides resolution authorities with broader powers to implement
other resolution measures, which may include, among other things, the sale of the
institution's business to a third party or a bridge institution, the separation of
assets, the replacement or substitution of the institution as obligor in respect of
debt instruments, modifications to the terms of debt instruments (including altering
the maturity and/or the amount of interest payable and/or imposing a temporary suspension
on payments) and discontinuing the listing and admission to trading of financial instruments.
If the financial condition of the Crédit Agricole Group or Crédit Agricole S.A.
deteriorates,
or is perceived to deteriorate, the exercise of bail-in powers and other resolution
measures by the resolution authority as described above could accelerate the decline
of the market value of the shares and other securities of Crédit Agricole S.A..
2. RISK MANAGEMENT
2.1 CONCISE STATEMENT
ON RISKS
Statement prepared in compliance with Article 435(1)(f) of Regulation (EU) No 575/2013.
Crédit Agricole CIB has learned from the 2007/2008 crisis and has considerably
reduced
its risk appetite, primarily by suspending or cutting back on some of its market activities.
Its strategic guidelines and management and control systems have therefore been scaled
in such a way as to maintain a controlled risk profile which is adapted to well thought
out commercial ambitions, a still uncertain economic climate and greater regulation.
The Board of Directors approved Crédit Agricole CIB's risk appetite for the first
time on 30 July 2015. It is updated regularly and at least annually by the Board to
ensure that it remains consistent with the financial objectives of Crédit Agricole
CIB and that it reflects the regulatory constraints, in particular Pillar II. The
2018 risk appetite was approved by the Board on 9 February 2018.
2.1.1 Risk appetite
framework
CRÉDIT AGRICOLE
GROUP APPROACH AND RISK LEVELS
In accordance with the Group's approach, Crédit Agricole CIB expresses its risk
appetite
qualitatively as well as quantitatively based on key indicators, the most significant
of which are broken down into several risk levels:
| ― |
appetite is used for managing normal everyday risk. It is expressed
in budget targets
for solvency and liquidity, and in operational limits for market and counterparty
risks, any breach of which is immediately flagged up and then resolved by Executive
Management;
|
| ― |
tolerance is used for exceptional management of an increased
level of risk. Any breach
of tolerance thresholds triggers an immediate report both to the Group Risk Management
Department (DRG) and to the Chairman of the Crédit Agricole CIB Board of Directors
Risk Committee which is then, if necessary, referred up to the Board of Directors;
|
| ― |
capacity is the maximum risk that Crédit Agricole CIB could theoretically
take on
without infringing its operational or regulatory constraints.
|
ROLE OF THE BOARD
OF DIRECTORS
Crédit Agricole CIB's risk appetite must be approved by its Board of Directors,
following
a proposal by Executive Management and after it has been examined by the Board of
Directors Risk Committee. Crédit Agricole CIB's risk profile is examined on a regular
basis (at least quarterly) by the Risk Committee and by the Board of Directors to
ensure that it is still compliant with the risk appetite which has been defined and,
where necessary, the risk appetite should be adjusted to be in keeping with changes
to the economic climate, regulatory constraints and with Crédit Agricole CIB's commercial
and financial goals.
RISK APPETITE,
SPECIFIC RISK STRATEGIES AND SECTOR POLICIES
Every business line, country or significant sector of the Bank defines periodically
a risk strategy that is specific to it and consistent with its financial objectives
and its competitive positioning. These risk strategies are approved by the Strategies
and Portfolios Committee (CSP) chaired by the Executive Management and, if necessary,
by the Group Risk Committee (CRG) chaired by the Executive Management of Crédit Agricole
S.A. for risk strategies which the shareholder wishes to authorise at its level, and
then lastly, in compliance with the Ministerial Order of 3 November 2014, by the Board
of Directors.
Crédit Agricole CIB has also introduced Corporate Social Responsibility (CSR) sector
policies in cooperation with the Group as a whole to manage the reputational risks
stemming from the social and environmental impacts of its activities. These policies
set out analysis criteria for these specific risks, which may cause Crédit Agricole
CIB not to complete a transaction which displays (or in some cases does not display)
certain (required or excluded) characteristics in certain sectors such as armaments,
nuclear or coal (see paragraph 4.4 of the chapter 2). Much like the specific risk
strategies, these sector policies are approved by the Strategy and Portfolio Committee
(CSP) and then by the Board of Directors. Ultimately, Crédit Agricole CIB's risk appetite
therefore comprises the following five components which form a coherent whole and
incorporate the Bank's commercial strategy:
i. the overall risk strategy
ii. the dashboard of key indicators broken down into three risk levels, monitored
quarterly;
iii. this concise statement;
iv. the specific risk strategies (updated periodically);
v. the sector policies.
TYPES OF RISK:
OWN RISKS AND IMPOSED RISKS
In order to meet its commercial and financial goals, Crédit Agricole CIB selects
the
majority of its own risks: counterparty risks, market risks and liquidity risks are
taken on intentionally to generate income and profit. Therefore, Crédit Agricole CIB
defines its appetite by ensuring that risks are in proportion with its commercial
strategy and financial objectives, taking into account its previous performance, competitive
position and the current economic cycle, while ensuring that all regulatory requirements
(particularly those related to solvency and liquidity) are met.
Other risks such as operational and certain non-compliance risks are essentially
imposed,
although the implementation of protective measures and control systems helps to limit
these risks and their potential consequences. The Bank has no appetite for these risks.
The Bank's appetite is therefore expressed through certain control and watch list
indicators, whose purpose is to reduce the impact of these risks to a bare and tolerated
minimum.
2.1.2 Overall
risk profile at 31 December 2018
At 31 December 2018, the consolidated risk profile of Crédit Agricole CIB was below
the tolerance level approved by its Board of Directors.
2.1 GLOBALLY-MANAGED
RISKS: SOLVENCY AND LIQUIDITY
SOLVABILIT SOLVENCY
Key solvency risk indicators include:
| ― |
the Risk-Weighted Assets (RWA) calculated using regulatory methods;
|
| ― |
the economic capital originating from the "Internal Capital Adequacy
Assessment Process"
(ICAAP - see paragraph 3.2 of this chapter);
|
The regulatory RWAs are used to calculate nearly all of Crédit Agricole CIB's risks:
credit risks, market risks and operational risks. This key indicator fully expresses
the overall quantity of risk that the Bank is willing to take on (appetite), does
not wish to exceed under any circumstances (tolerance), and the maximum risk in accordance
with the regulatory constraints (capacity).
At 31 December 2018, Crédit Agricole CIB's regulatory RWAs stood at €118.7 billion
(see paragraph 3.1.6.4 of this chapter) and were below the Bank's tolerance threshold.
The internal economic capital requirements are calculated using stricter methodologies
than the regulatory approaches. This calculation considers risks not included in Pillar
1, and quantifies them using in-house methodologies. The internal economic capital
requirements of Crédit Agricole CIB are below its tolerance level.
LIQUIDITY
Key liquidity risk indicators include:
| ― |
resistance periods for short-term liquidity stress;
|
| ― |
the Stable Funding Position (PRS); and
|
| ― |
the Liquidity Coverage Ratio (LCR).
|
Short-term liquidity stress is applied based on crisis scenarios that Crédit Agricole
CIB believes that it could face should an event affect the Group (idiosyncratic crisis),
the whole of the inter bank market (systemic crisis), or a combination of the two
(global crisis). The stable funding position, defined as a long-term surplus of resources
over long term assets, aims to protect business lines from the consequences of market
stress.
LCR came into force on 31 October 2015. This ratio requires the Bank to retain
sufficient
unencumbered High-Quality Liquid Assets (HQLA) that can be converted into cash easily
and immediately, on private markets, assuming a liquidity crisis lasting 30 calendar
days. At 31 December 2018, all of these indicators were compliant with the Bank's
tolerance in this area. Note that the LCR percentage of 119% far exceeds the regulatory
requirement of 100%.
RISKS SPECIFICALLY
MANAGED WITHIN THE CORPORATE AND INVESTMENT BANKING (CIB) AND WEALTH
MANAGEMENT BUSINESS LINES
CREDIT
Crédit Agricole CIB's Corporate and Investment Banking is based on debt-related
business:
credit risk is therefore central to its activities and is by far the greatest risk.
Like Crédit Agricole CIB's competitors, CIB customers are often large multinationals
or major financial institutions which by their very nature, in addition to individual
creditworthiness issues, generate a concentration risk in this area. This risk should
however be put into perspective by viewing the Crédit Agricole Group as a whole. The
refocusing strategy applied since the financial crisis slightly reduced the number
of counterparties and geographical sites, and therefore resulted in a relative increase
in the portfolio concentration. However the Bank is still active in a large number
of countries and economic sectors, thus benefiting from the positive effect of sectoral
and geographical diversification. This effect is measured and monitored under ICAAP.
On the other hand, Crédit Agricole CIB's Wealth Management (WM) business line generates
few credit risks, as the majority of its services are Lombard loans which are secured
against collateral such as: cash, securities, life insurance contracts, etc.
Therefore, Crédit Agricole CIB's risk appetite is defined in accordance with three
key indicators:
| ― |
expected losses (EL) within one mid-cycle year for all of its
exposures using the
internal ratings-based approach (IRBA), with the exception of exposures at default
(separate thresholds for CIB and Wealth Management);
|
| ― |
unexpected losses due to the sudden and simultaneous default
of several investment
grade counterparties (CIB only);
|
| ― |
the proportion of unsecured credit (Wealth Management only).
At 31 December 2018,
all three indicators were below the Bank's tolerance thresholds.
|
MARKET RISKS
A series of refocusing and adaptation plans have reduced Crédit Agricole CIB's
market
activity and the resulting risk. This redimensioning plan followed the response to
the financial crises of 2007-2008, and then 2011, and the choice to discontinue activities
which were deemed to be non-strategic or below their critical size. Thus, Crédit Agricole
CIB disposed of its European (Cheuvreux) and Asian (CLSA) equity brokers, together
with its 50% stake in Newedge Group (derivatives brokerage). It also ceased its commodity-related
activities and gave up its market-making role for credit derivatives. The Bank also
suspended its own-account activities and, under the French Banking Law (LBF), was
not required to set up an ad-hoc subsidiary. Finally, the Bank's Treasury Department
is responsible for the sound and prudent management of cash, as required under the
LBF.
Crédit Agricole CIB has retained its appetite for market risks in its CIB activities,
when such risks are adopted by supplying corporate customers and financial institutions
with the investment products and services that they require (including some structured
products), and by assuming its role as a market maker for certain market segments
and instruments. Wealth Management on the other hand is only exposed to a very low
level of market risks.
Therefore, Crédit Agricole CIB's market risk appetite is defined in accordance
with
two key indicators:
| ― |
maximum one-day loss within a confidence interval of 99%, or
Value-at-Risk ("VaR"
- see definition and calculation method in paragraph 2.5.2 of this chapter); and
|
| ― |
adverse and extreme stress (see definition and calculation method
on page 196, to
understand maximum loss in theoretical extreme market conditions which systematically
contradict the Bank's positions.
|
At 31 December 2018, these indicators were below the Bank's tolerance, with a VaR
of €4.5 million (see paragraph 2.5.2 of this chapter).
IMPOSED OPERATIONAL
RISKS
Crédit Agricole CIB's imposed operational risks are defined in accordance with
two
key indicators, while setting specific thresh olds for the CIB and Wealth Management
business lines:
| ― |
total operational losses observed during the year; and
|
| ― |
major operational risk incidents.
|
At 31 December 2018, these indicators were compliant with the Bank's operational
risk
tolerance.
LEGAL AND NON-COMPLIANCE
RISKS
Crédit Agricole CIB has no appetite for legal and non-compliance risks. However,
any
banking activity which generates income may lead to administrative or disciplinary
sanctions in the event of a failure to comply with the rules relating to this activity,
whether they be laws, regulations, professional or ethical standards, or even instructions
from the Bank's managers. Crédit Agricole CIB manages the non-compliance risk situations
inherent to income generation by measuring the proportion of activities performed:
| ― |
with the most risky customers from a financial security viewpoint;
|
| ― |
for the most complex products on the market.
|
Specific thresholds are set out for CIB and Wealth Management according to the
methods
they respectively use to classify financial security or suitability risks, and to
references appropriate to their business activities (commercial income or managed
assets).
At 31 December 2018, these indicators were below the tolerance thresholds.
REPUTATIONAL RISKS
At 31 December 2018, Crédit Agricole CIB was not exposed to any reputational risk
and was compliant with its CSR sector policies.
2.2 ORGANISATION
OF THE RISK FUNCTION
The Risk Management and Permanent Control (RPC) Department is in charge of the
supervision
and permanent control of risks across the whole Crédit Agricole CIB Group's scope
of internal control. It carries out second-level supervision and permanent control
of credit risks, market risks, country and portfolios risks, operational risks and
accounting risks.
The organisation of Crédit Agricole CIB's Risk Management and Permanent Control
function
is integrated into the Crédit Agricole S.A. Group's Risk Management and Permanent
Control business line. Risk management is delegated to Crédit Agricole CIB under formally
adopted subsidiarity and delegation principles.
Within this framework, the RPC regularly reports its major risks to Crédit Agricole
S.A.'s Group Risk Management Department, and has Crédit Agricole S.A.'s Group Risk
Committee (CRG) approve those cases which exceed its authorised limits as well as
subs tantial risk strategies at the Crédit Agricole S.A. Group level.
2.2.1 Global organisation
The RPC is based on a global organisation with the following attributes:
| ― |
all risk management tasks and business lines, whatever their nature
or location, are
grouped together within one division. This division has four decision-making and management
departments, each specialised in one business sector, and six other cross-functional
departments dedicated to supervision and control:
1. The specialised decision-making and management departments for each business
activity:
| ― |
Markets: Market and Counterparty Risk (MCR);
|
| ― |
Credit: Sectors, Corporates and Structured (SCS), Financial Institutions,
Sovereigns
and Countries (FSP), Sensitive Cases and Impairment (ASD).
|
2. The cross-functional departments dedicated to supervision and control:
| ― |
Supervision: Portfolio Models and Risk (MRP), Central Management
(MGC), Staff and
Risk Culture (EMC), Architecture and Project Management (APM).
|
| ― |
Control: Credit Administration and Monitoring (CAM) and Permanent
Control, Operational
Risk and Corporate Secretary (GPO), and Validation of Regulatory Models on Market
Activities.
|
|
| ― |
All of Crédit Agricole CIB's local and regional RPC managers
within the international
network report directly to the managers at the RPC head office;
|
| ― |
permanent controllers at head office report functionally to the
Operational Risk and
Permanent Control Department;
|
| ― |
Crédit Agricole CIB's head of Risk Management and Permanent Control
reports hierarchically
to Crédit Agricole S.A.'s head of Group Risks;
|
| ― |
Crédit Agricole CIB's head of Risk Management and Permanent Control
(who is a member
of the Executive Committee) reports functionally to Crédit Agricole CIB's Executive
Management.
|
2.2.2 Governance
and general management of activities
INFORMATION ON
THE CRÉDIT AGRICOLE CIB GOVERNANCE BODIES
The Risk Committee of the Board and the Crédit Agricole CIB Board of Directors
receives:
| ― |
the Internal Control Report (formerly RACI) each year;
|
| ― |
a report on risk management and the main exposure areas each
quarter, and specific
reports as and when needed.
|
OVERALL MANAGEMENT
OF THE ACTIVITIES
DEFINITION OF
THE RISK PROFILE AND RISK STRATEGIES
A member of the Executive Management is at the head of the Strategy and Portfolio
Committee (CSP). Its main missions are:
| ― |
to ensure that the Bank's global strategy is consistent with
its capacity to take
risks, to set guidelines that will become specific operational rules, notably such
as risk strategies, and to work on alert and Business Watch topics;
|
| ― |
the CSP also oversees each location/country, each business line/major
sector within
a specific risk strategy, giving the main development guidelines for each business;
it also decides on the main risk budgets for the global portfolio.
|
DECISION-MAKING
PROCESS
The decision-making process within Crédit Agricole CIB is ensured by dedicated
committees:
| ― |
business and geographical committees are in charge of retail
financing within the
limits granted to each manager;
|
| ― |
the most significant files are reviewed by the Counterparties
Risk Committee (CRC)
which is chaired by a member of Executive Management. The Crédit Agricole S.A. Group
Risk Management Division (DRG) is systematically a member of this committee and receives
all the files; the cases with an amount higher than the limits granted to Crédit Agricole
CIB are presented for decision to the Crédit Agricole S.A. Executive Management, after
hearing the Group Risk Management Division (DRG);
|
| ― |
the Market Risk Committee (CRM), which is also chaired by a member
of Executive Management,
monitors market exposures twice a month. The CRM sets the limits and does controls
on compliance accordingly.
|
ANTICIPATION OF
COUNTERPARTY DETERIORATION
Anticipation of the potential deterioration of counterparties is addressed under:
| ― |
monthly Early Warning meetings, scheduled by the Business Watch
function attached
to the Central Management Department, which aim to identify early signs of potential
deterioration of counterparties hitherto considered sound. After a review of the information
gathered, these meetings are intended to draw the most appropriate operational consequences
from the review, depending on whether its conclusions are positive (signs ultimately
considered innocuous or benign, not justifying at this stage a challenge to the customer)
or negative (confirmation of concern necessarily resulting in a reduction of our risk
exposure);
|
| ― |
early detection by means of ongoing monitoring of portfolios
and sub-portfolios to
detect counterparties demonstrating various weak or strong alert signals identified
from information passed on by the risk teams and front office staff, data obtained
from internal databases and market information;
|
| ― |
stress scenarios, performed to enable measurement of the impact
of a shock on a portfolio
or sub portfolio (for application of Pillar 2 of Basel II) and to identify the sectors/segments
requiring provisions.
|
The objective is to anticipate as early as possible, in order to act upstream of
a
deteriorating situation. Preventive measures are likely to be more effective and less
costly than initiatives which begin later on.
CONTROL OF SENSITIVE
CASES
The control of sensitive cases is ensured by a dedicated team. Debts that are under
special supervision or classified as in default are revised quarterly.
OPERATIONAL MANAGEMENT
BODIES
In addition to the committees in charge of risks (CRC and CRM), risk management
reports
are also regularly presented to the following Executive Management bodies:
| ― |
the Crédit Agricole CIB Executive Committee, with debates and
discussions dedicated
to risk management;
|
| ― |
the Internal Control Committee which is responsible for monitoring
market and counterparty
limits, controlling operational risks and following-up recommendations from internal
and external audit bodies;
|
| ― |
the top-level Permanent Control Committee, which approves the
functions assigned to
Permanent Control, examines the Permanent Control systems of the Business Lines or
branches, as well as cross-functional problems. It also supervises management of Crédit
Agricole CIB Group's operational risks.
|
CREDIT AGRICOLE
S.A. RISK MANAGEMENT PROCESS
Crédit Agricole CIB is part of the Crédit Agricole S.A. risk process which is structured
around the following bodies:
| ― |
the Group Risk Committee is chaired by the Crédit Agricole S.A.
Chief Executive Officer.
Crédit Agricole CIB mainly presents to the committee its one off approval requests,
its main risk strategies, its budgets and commitments on emerging countries, the corporate
significant outstandings, individual exposures, the sensitive cases, the limits as
well as the market risk situation;
|
| ― |
the Risk Monitoring Committee which belongs to the CRG. Chaired
by the Crédit Agricole
S.A. Chief Executive Officer, this committee reviews counterparties which show signs
of deterioration or a need of arbitrage between entities of the Group;
|
| ― |
the Standards and Methodology Committee (CNM) chaired by the
Crédit Agricole S.A.
Head of Risk and Permanent Controls to which Crédit Agricole CIB submits any proposed
or existing methodology as regards Basel risk qualification or measurement prior to
application within Crédit Agricole CIB, as well as, more broadly, points of attention
of any kind likely to impact the Group's risk profile, net income or solvency (risk
factors linked to a sector of the economy, country, product category, business activity,
regulatory change, etc.);
|
| ― |
finally, the Crédit Agricole S.A. Group Risk Department is a
permanent member of the
Crédit Agricole CIB Internal Control Committee (CCI).
|
2.3 INTERNAL CONTROL
AND RISK MANAGEMENT PROCEDURES
2.3.1 Definition
of the internal control system
Within the Crédit Agricole Group, the internal control system is defined as all
procedures
aimed at controlling activities and risks of all kinds and enabling transactions to
be carried out properly, securely, and efficiently, in accordance with the reference
documents referred to below. Crédit Agricole CIB, which is a wholly-owned subsidiary
of the Crédit Agricole Group, complies with the rules laid down in French and international
regulations and with the rules and regulations set by its parent company.
The internal control system and procedures can therefore be classified by their
purpose:
| ― |
application of instructions and guidelines determined by Executive
Management;
|
| ― |
financial performance through effective and adequate use of the
Group's assets and
resources, and protection against the risks of loss;
|
| ― |
comprehensive, accurate and ongoing knowledge of the data required
to make decisions
and manage risks;
|
| ― |
compliance with internal and external rules;
|
| ― |
prevention and detection of fraud and errors;
|
| ― |
accuracy and completeness of accounting records and timely production
of reliable
accounting and financial information.
|
However, this system and these procedures have limits, relating in particular to
technical
problems and staff shortcomings.
Under the systems implemented within this standardised framework, certain resources,
tools and reporting documents are made available to the Board, to Executive Management
and to other managers so that they can assess the quality of the internal control
systems and their adequacy.
2.3.2 Reference
documents relating to internal control
2.3.2.1 LAWS AND
REGULATIONS
The internal control procedures implemented by Crédit Agricole CIB comply with
the
laws and regulations governing French credit institutions and investment companies,
and namely with:
| ― |
the French Monetary and Financial Code,
|
| ― |
the Decree of 3 November 2014, relating to the internal control
of banks, payment
services companies and investment companies, under the control of the French Prudential
Supervisory and Resolution Authority (ACPR);
|
| ― |
all texts relating to the conduct of banking and financial activities
(collated by
the Banque de France and CCLRF);
|
| ― |
the General Regulations of the French Financial Markets Authority
(AMF or Autorité
des Marchés Financiers).
|
The Company's internal control system also takes into account the following international
reference documents:
| ― |
the Basel Committee's recommendations on banking control;
|
| ― |
local applicable laws and regulations in the countries in which
the Group operates;
|
| ― |
European and international regulations (EMIR, DFA, etc.) applicable
to the activities
of Crédit Agricole CIB.
|
MAIN INTERNAL
REFERENCE DOCUMENTS
The main internal reference documents are:
| ― |
Procedural memo 2016-01 on the organisation of internal control
within the Crédit
Agricole S.A. Group;
|
| ― |
Procedural memos dealing with the Crédit Agricole S.A. Group's
risk management and
permanent controls;
|
| ― |
documents circulated by Crédit Agricole S.A., relating to subjects
including accounting
(Crédit Agricole accounts plan), financial management, risk management and permanent
controls;
|
| ― |
the Code of Conduct of the Crédit Agricole Group;
|
| ― |
the Crédit Agricole CIB Code of Conduct "Our principles to build
the future";
|
| ― |
corpus of governance texts, published on the Crédit Agricole
CIB "Corporate Secretary"
Intranet database, in particular about compliance, risks and permanent control, and
more precisely the texts linked to permanent control applied within the scope of the
Crédit Agricole CIB Group's surveillance (text 4.0 on the organisation of internal
control, text 4.4 on the organisation and governance of permanent controls, and text
1.5.1 on the supervision of essential outsourced services) and the Crédit Agricole
CIB compliance manuals, the Crédit Agricole CIB Code of Conduct "Our principles for
the future", and the procedures in the different departments of Crédit Agricole CIB,
its subsidiaries and branches.
|
ORGANISATION OF
THE INTERNAL CONTROL SYSTEM
♦ Basic principles
The organisational principles and components of Crédit Agricole CIB's internal
control
systems, which are common to all Crédit Agricole Group entities, are as follows:
| ― |
information and involvement of the supervisory body (approval
of risk appetite and
risk strategies, update on the risk situation, activities and results of internal
control);
|
| ― |
the direct involvement of the Executive Directors in the organisation
and operation
of the internal control system;
|
| ― |
complete coverage of activities and risks;
|
| ― |
responsibility of all persons involved;
|
| ― |
clear definition of tasks;
|
| ― |
effective separation of commitment and control functions;
|
| ― |
formal and up-to-date delegations of powers;
|
| ― |
formal and up-to-date standards and procedures, especially for
accounting and information
processing.
|
These principles are supplemented by:
| ― |
systems to measure, monitor and control credit, market, liquidity,
financial and operational
risks (transaction processing, information systems processes), accounting risks (including
quality of financial and accounting information), non-compliance risks and legal risks;
|
| ― |
a control system, forming part of a dynamic and corrective process,
encompassing permanent
controls, which are carried out by the operating units themselves or by dedicated
staff, and periodic controls (Group Control and Audit).
|
The internal control system is also designed to ensure that the compensation policy
is consistent with risk management and control objectives, particularly with regard
to market operators. As such, the Risk Committee, a specialised Committee of the Board
of Directors, whose task is specifically to examine, without prejudice to the Compensation
Committee, whether the incentives provided by the Company's compensation policy and
practice are consistent with its situation in light of the risks to which it is exposed.
The internal control system is also designed to ensure that the corrective measures
adopted are applied within a reasonable time.
♦ Monitoring of
the process
In order to ensure that the internal control system is consistent and efficient
and
that the above-mentioned principles are applied by all entities within the scope of
Crédit Agricole CIB's consolidated control system, three separate persons responsible
for Periodic Control (Audit-Inspection), Permanent Risk Control and Compliance Control
have been appointed.
The Internal Control Committee, chaired by the Chief Executive Officer, is responsible
for:
| ― |
reviewing internal control procedures and the control system
implemented;
|
| ― |
examining the main risks to which Crédit Agricole CIB is exposed
and any changes in
risk measurement systems;
|
| ― |
deciding on remedial measures to be taken to address the weaknesses
identified during
audits, either in internal control reports or as a result of problems that have occurred;
|
| ― |
monitoring the fulfilment of the commitments made following internal
and external
audits;
|
| ― |
taking any decisions necessary to make up for the weaknesses
in the internal control.
|
Its members are the Heads of Group Internal Audit (Crédit Agricole S.A.), Internal
Audit (Crédit Agricole CIB), Corporate Secretary, Finance, Risk Management and Permanent
Controls, Compliance, Fraud Prevention, Legal and, depending on the matters under
discussion, the heads of other Bank units.
The committee met four times in 2018.
Local internal control committees have also been set up in several subsidiaries
and
branches, both in France and abroad.
In addition, a top-level Permanent Control Committee has been established. Chaired
by the Chief Executive Officer or, in his absence, the Deputy Chief Executive Officer,
this committee is responsible for:
| ― |
supervising the operation of the Permanent Control system and
operational risk management
of the Crédit Agricole CIB Group;
|
| ― |
investigating all matters related to this assignment, either
for information or decision-making
purposes;
|
| ― |
resolving any discrepancies or interpretations relating to the
Permanent Control system.
|
This committee comprises in particular the head of Risk Management and Permanent
Control
(RPC), the head of Permanent Control, Operational Risks and Corporate Secretary, the
head of Global Compliance, the head of Legal Functions and the head of Group Internal
Audit.
The Head of Group Risk Management (DRG) - Operational Risk and Permanent Control
at
Crédit Agricole S.A. may sit in on all meetings. The committee met four times in 2018.
In addition to the permanent control committees established in the head office
departments,
local committees have been established in the subsidiaries and branches in France
and abroad. These are held monthly (outside of months when a CCI is being held), either
face to face or online.
♦ Role of the
supervisory body: Board of Directors
The Board of Directors decides on strategy and controls the implementation of oversight
by the Executive Directors. It approves and regularly reviews the Bank's risk appetite
and risk strategies. It is notified of the organisation, work and results of internal
control, and of the main risks facing the Bank.
The Board of Directors refers to four specialised committees to carry out its missions:
the Audit Committee, the Risk Committee, the Appointments and Governance Committee
and the Compensation Committee. The main responsibilities of the Board and its Committees
are listed below and described in further detail on chapter 3, paragraph 1.2.4:
| ― |
the Board of Directors reviews and approves the Bank's risk appetite
at least once
a year, after review by the Risk Committee;
|
| ― |
every quarter, the Board of Directors reviews and approves, after
scrutiny by the
Risk Committee, the specific risk strategies by country, profession or sector, that
were set during the previous quarter by the Strategy and Portfolio Committee or by
the Group Risk Committee;
|
| ― |
in addition to the information regularly sent to the Board of
Directors, particularly
on the overall risk limits and exposures, compliance, legal risks and liquidity, a
report on internal control and risk measurement and monitoring is presented to it
twice a year, as well as a quarterly status report on risk - Management and exposure.
This quarterly report specifically includes a presentation on market risks, counterparty
risks, operational risks and a review on the Company's situation with regard to risk
appetite. This information and these reports are reviewed beforehand by the Risk Committee;
|
| ― |
the Board is informed of any significant fraud event or any other
event detected by
internal control procedures in accordance with the criteria and thresholds that it
has set. A reminder of the feedback procedure for this information to the corporate
bodies is provided in the Company's internal documentation.
|
| ― |
a presentation of periodic control reports is made twice a year
to the Board of Directors,
after review by the Risk Committee;
|
| ― |
the report to the AMF by the head of Compliance for Investment
Services (RCSI) is
presented to the Board of Directors each year.
|
♦ Role of the
Executive Directors: Executive Management
The Executive Directors are directly involved in the organisation and operation
of
the internal control system.
They ensure that risk strategies and limits are compatible with the financial position
(capital levels, earnings) and strategic guidelines set by the supervisory body.
The Executive Directors define the Company's general organisation and oversee its
effective implementation by the competent staff. They assign clear roles and responsibilities
in terms of internal control and allocate the appropriate resources. They oversee
the implementation of risk identification and measurement systems that are appropriate
for the Company's activities and organisation. They also ensure that they regularly
receive the key information produced by these systems and that the internal control
system is continuously monitored to verify its suitability and effectiveness. They
are informed of the main problems identified by internal control procedures and the
remedial measures proposed, notably by the Internal Control Committee.
♦ Scope and consolidated
organisation of Crédit Agricole CIB's internal control systems
In accordance with the principles applied within the Group, Crédit Agricole CIB's
internal control system applies to its branches and subsidiaries in France and other
countries, irrespective of whether they are under its sole control or joint control.
The system is intended to govern and control activities, and to measure and monitor
risks on a consolidated basis.
Each entity within the Crédit Agricole CIB Group applies this principle to its
own
subsidiaries, thus creating a logical internal control structure pyramid and strengthening
the consistency between different Group entities.
In this way, Crédit Agricole CIB ensures that it has an adequate system within
each
of its risk-bearing subsidiaries, and those activities, risks and controls are identified
and monitored on a consolidated basis within these subsidiaries, particularly as regards
accounting and financial information.
In 2018, the Crédit Agricole CIB governance document was updated to take into account
the new Group Procedural Memo on the organisation of internal control (see above,
"Main Internal Reference Documents"). This document will introduce the notion of "Consolidated
Supervision Scope", by defining its rules for determining supervision and governance
information procedures.
BRIEF DESCRIPTION
OF THE INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT PROCEDURES IMPLEMENTED
WITHIN THE COMPANY
♦ General presentation
Detailed information on credit, market, operational and liquidity risk management
is provided in the "Risk factors and Pillar 3" section and in the notes to the financial
statements.
The internal control system is based on three levels of controls, which distinguish
permanent control from periodic control.
Permanent control is carried out as follows:
| ― |
first degree permanent controls are carried out when a transaction
is initiated and
while the transaction is being validated. They are carried out by the operators themselves,
by the hierarchy within the unit or by automated transaction processing systems;
|
| ― |
second degree, first level permanent controls are carried out
by employees who are
separate from those who initiated the transactions and who may perform operational
activities;
|
| ― |
second degree, second level permanent controls are carried out
by staff working exclusively
at the final level of specialist permanent control with no authorisation to make risk-taking
commitments (credit or market risk control, accounting control, compliance control
etc.). It should be noted that Crédit Agricole CIB has an alternative regime to Crédit
Agricole S.A. for the organisation of its second-degree;
|
By derogation, the permanent controllers of corporate centres and support functions
of the headquarters functionally report to the RPC. This derogation, granted by Crédit
Agricole S.A., will come to an end on 31 March 2019, when they will report to RPC
hierarchically, and functionally to the corporate centres and support functions.
The periodic (third-degree) controls cover occasional onsite audits of accounting
records relating to all of the Company's activities and functions by Group Control
and Audit.
The system of permanent controls is based on a platform of operational controls
and
specialised controls. Within the departments at the head office, the branches and
the subsidiaries, procedural manuals describe the controls to be performed and the
related operational permanent controls.
The controls, which may be integrated into the automated transaction processing
systems,
are catalogued and updated, largely on the basis of the operational risk map.
The results of the controls are formalised through control records, notably within
the SCOPE Group IT system, and are included in periodic summary reports to the appropriate
management level (in the branch network and at the head office) and, in a consolidated
manner, to the head of Permanent Control and the top-level Permanent Control Committee.
This system is continuously updated. It must specifically cover the entities of
the
consolidated supervision scope along with changes related to the activity, the organisation
and the IT system. In that regard, careful attention is paid to maintaining the quality
of operations and a suitable internal control system.
Since 2016, the Qualitative aspect of the ICAAP (Internal Capital Adequacy and
Assessment
Process) has been fully included within the annual report on internal control (RACI).
Further, the SCOPE standard control plan underwent a full review, and in 2018 we introduced
a new mapping module in the OLIMPIA tool.
For 2019, in addition to continuing the ICAAP work (methodology, governance, etc.)
we will introduce a new 2.2 controls plan module, as well as a module to monitor the
Action Plans in OLIMPIA. It is envisaged that the governance documents will be updated
after the hierarchical reporting of the permanent controllers at head office.
♦ Detailed presentation
FIRST-DEGREE CONTROLS
They are performed in a hierarchical environment where the technical actions which
are the subject of the control are carried out. The definition of these controls and
the analysis of their results is first and foremost the responsibility of management
of the scope where they are applied, the "4 eyes" principle.
Permanent, first degree controls are applied to the tasks carried out by all business
lines and support functions of the Bank. It is the business line or support function
themselves which define them and implement them whilst delegating responsibility to
the operational players of their scopes.
Operating staff are therefore expected to remain vigilant at all times with regard
to the transactions they handle. This should take the form of compliance with all
procedures introduced to ensure the procedural compliance, security, validity and
completeness of transactions. Each line manager must check, for the activities for
which he/she has responsibility, that his/her staff are aware of and comply with the
rules and internal procedures for processing transactions.
SECOND-DEGREE,
FIRST-LEVEL CONTROLS
They are performed in a hierarchical environment which is independent from that
where
the action being audited was carried out.
Hence the "2 nd degree" description. They are applied to situations
considered to be sufficiently
sensitive to require, as a result of regulation or a management decision, a segregation
of tasks in the implementation phase, or an independent perspective.
In certain configurations, permanent level 2.1 controls may be activated in the
absence
of permanent level 1 controls.
SECOND-DEGREE,
SECOND-LEVEL CONTROLS
They are performed in a hierarchical environment which is independent from that
where
the action being audited was carried out, hence the "2 nd degree" description.
They are performed by specialist audit agents who are detached from any operational
mandate under the control scope or any other scope, except for that which aims to
enable the operation of their own tools. This operational independence is reflected
in the suffix "2 nd level" which is added to the 2 nd degree
status.
The 2 nd level, 2 nd degree controls (or, more frequently
referred to as "2.2") apply to different situations:
| ― |
Performing final controls and analysis on the basis of results
from level 2.1 controls.
This is part of a chain of permanent controls including the three pillars.
|
| ― |
Checking the quality of a specialised 2 nd degree,
1 st level control relating to aggregated elements or a set of processes,
if the risk
represented by these elements or these processes is considered sufficiently sensitive.
|
| ― |
In the case of an unexpected audit or when there is an incident,
check the quality
of a 1 st degree control when there is no 2 nd degree, 1 st
level control.
|
The systematic "triplication" of permanent control (levels 1, 2.1 and 2.2) is not
standard and must be justified by the level of risk of the action. Neither should
a level 2.2 control compensate for the absence of a level 1 or 2.1 control in situations
where one or the other should normally exist, except for in very exceptional cases
(closure of a unit, unexpected absence of someone, user back-up plan etc.).
RISK AND PERMANENT
CONTROL DEPARTMENT
The roles and responsibilities in risk management are outlined in the section above,
"Organisation of the Risk function".
♦ Risk projects
Project RC 3.0:
The Counterparty Risk 3.0 programme is managed by the APM (Architecture & Project
Management) team, a project team which reports to the "Risk and Permanent Control"
Department of Crédit Agricole CIB. This programme meets the objective of significantly
and continuously improving the counterparty risk control mechanism, while meeting
new regulatory requirements. A Financial and Strategic Steering committee, chaired
by the Head of the Risk Department, brings together risk department managers, representatives
of the business lines concerned and from IT, and monitors the projects selected:
| ― |
The Anacredit (ANAlytical CREdit Data Set) project: European
analytic database on
credits which concerns all financial institutions in the Euro zone as part of the
Single Supervisory Mechanism (SSM).
|
| ― |
The aim of the RADaR project is to provide users with a single
platform containing
all counterparty risk data and to incorporate PRISM into the RADaR ecosystem, using
the standard GIT.
|
| ― |
SDP Upgrade: project to improve the counterparty risks transaction
database by processing
the obsolescence of some technical components and improving the ergonomics of some
modules to decrease operational risk.
|
| ― |
The STI project aims to introduce the first operational components
to have a single,
unchanging identifier for each transaction with our clients.
|
| ― |
Extension to new counterparties (Sept 2018 lot) affected by the
introduction of margin
requirements on derivatives transactions not offset centrally (Margin Requirements
Project).
|
MASAI FRTB Project:
Project led by RPC and sponsored by GMD and RPC, aims to bring in:
| ― |
A new market risks ecosystem based on Big Data technology in
response to a strong
increase in data volumes and significant complexity of market risk indicators
|
| ― |
Compliance vis-à-vis regulation of BCBS239 principles with the
introduction of a new
Market Risks Operating Model and FRTB regulation.
|
♦ Credit risk
Any counterparty or group of counterparties is subject to limitations within the
framework
of specific procedures.
The decision process is based on two authorised signatures from the front office
(one
as responsible for the application, the other being the Delegated Chairman of the
relevant committee) as well as an independent RPC opinion issued by an Authorised
Signatory. If the RPC's opinion is negative, the decision-making power is passed on
to the Chairman of the Committee immediately above.
Credit decisions are made using risk strategies defined for each major scope (country,
business line, sector) specifying the major guidelines (target client group, types
of products authorised, overall budgets and unit amounts envisaged, etc.) within which
each geographic entity or business line must focus its activity.
When a case is considered to be outside the framework of the risk strategy in force,
intermediary authorisations do not apply and a decision can only be made by the Executive
Management-level Committee (CRC). The RPC also identifies assets that may deteriorate
as soon as possible and initiates the most suitable measures to protect the Bank's
interests.
The process for monitoring receivables is enhanced by a system of portfolio and
sub-portfolio
analyses on group-wide business line, geographical or sector basis. Analysing concentrations
and, if applicable, recommendations for the reorganisation of the portfolio are an
integral part of this exercise.
In addition, portfolio reviews are organised periodically for each profit centre
in
order to verify that the portfolio complies with the risk strategy in force.
The rating of certain counterparties under review may be adjusted at this time.
In parallel, the new activities and new products management mechanism (NAP Committee)
ensures that all requests made by the businesses are in line with the strategies and
risks involved.
In addition, sensitive cases and major risks are monitored quarterly; other risks
are reviewed annually. The adequacy of the level of reserves in relation to risk is
assessed every quarter by the Executive Management, on the recommendation of the RPC.
This approach also involves stress tests, aimed at assessing the impact of unfavourable
macroeconomic assumptions and quantifying the risks to which the bank may be exposed
in an unfavourable climate.
♦ Country risks
Country risks are subject to an assessment and monitoring system based on a specific
rating methodology. Country ratings, which are updated at least quarterly, have a
direct impact on the limits applied to each country for the validation of their risk
strategy and on counterparty ratings.
♦ Market risks
Upstream market risk management takes place through several committees that assess
risks associated with activities, products and strategies before they are introduced
or implemented:
| ― |
the New Activity or New Product Committees, organised by business
line, allow the
Market Risk teams, among others, to pre-approve business developments;
|
| ― |
the Market Risk Committee (CRM), which meets twice a month, coordinates
the whole
market risk management system and approves the market risk limitations;
|
| ― |
the Liquidity Risk Committee (CRL) ensures the implementation
of Group standards for
monitoring liquidity risk at operational level;
|
| ― |
the Pricers Validation Committee reviews the pricers approved
during the year.
|
Risk management is carried out using a variety of risk measurements:
| ― |
global measurements using Value at Risk (VaR) and stress tests;
VaR measurements are
produced with a 1% probability of occurrence on a given day; stress tests include
general stresses (historical, hypothetical and adverse) and specific stresses for
each activity;
|
| ― |
specific measurements using sensitivity indicators and notional
measurements.
|
Lastly, the Valuations and Pricing Committees define and monitor the application
of
portfolio valuation rules for each product range. In 2018, projects on regulatory
themes continued i.e. roll-out of a Market Risks ecosystem meeting the requirements
of the Fundamental Trading BookReview and compatible with BCBS 239 requirements, managed
jointly with the Masai project.
♦ Operational
risks
Operational risk management relies mainly on a network of Permanent Control correspondents
coordinated by the RPC. Operational risks are monitored for each business line, subsidiary
and each region, which ensure the reporting of losses and incidents, as well as their
analysis, by Internal Control Committees.
In addition to actual losses, the operational risk scorecard methodology takes
into
account provisions, specifically for legal disputes since the end of 2013 and tax
disputes since the end of 2015.
Each quarter, the RPC produces an operational risk scorecard showing movements
in
operational risk-related costs and associated key events.
Remedial action following significant incidents is monitored closely, in conjunction
with business lines and support functions.
The operational risk map covering all business lines at head office, the international
network and subsidiaries is revised every year. Together with the compliance and legal
functions, the RPC takes into account non-compliance risks and legal risks.
In 2016, several specialists were recruited to the head office, in order to take
into
account French and international regulations concerning capital markets (Volcker rule,
French banking law) and IT system security (Information System Risk control). In the
past year, the extreme risk scenarios (see Group Advanced Measurement Approach) that
could affect Crédit Agricole CIB have also been updated, to take account of the major
events of the year. In 2018, we continued developing an integrated solution to monitor
operational risks, the OLIMPIA tool, including mapping of operational risks and reflecting
work to identify Crédit Agricole CIB's main processes and the expected developments
of organisational standards.
♦ Provision of
essential outsourced services (PSEE)
Any service or operational task classed as essential must meet certain monitoring
requirements defined as part of a procedure that in particular sets forth the way
in which outsourcing decisions are taken, the elements to be included in the contract
and the supervision procedures to ensure that all associated risks are managed and
that the service runs smoothly.
A dedicated governance (Outsourcing Committee) keeps track of the services, at
Executive
Management level, complemented by specialist monitoring in the areas most affected
by outsourcing (computing and back-office).
In addition, a review of all essential services, including a report on service
quality
(i.e. analysis of the main incidents and dysfunctions), and contract compliance is
presented to the top-level Permanent Control Committee.
For 2019, beyond the deployment of the new integrated IT solution (see "Operational
risks" paragraph), several actions are still expected to strengthen the organisation
and fine-tune the methodology in order to improve the quality of the monitoring and
consolidated reporting, in connection with the completion of projects conducted at
Group level.
PERMANENT CONTROL
OF ACCOUNTING AND FINANCIAL INFORMATION
The objectives of the permanent control of accounting and financial information
are
to provide adequate protection against major accounting risks that may damage the
quality of the accounting and financial information.
Crédit Agricole CIB applied the Crédit Agricole Group's recommendations in this
area.
Thus, the Permanent Accounting Control of the Risk Management Department ensures the
permanent control of the last level of accounting and financial information (second-degree,
second-level control (2.2) and consolidated second-degree, second-level control (2.2.C).
In this regard, it has the following tasks:
| ― |
production in the Group tool of degree 2.2 compatible control
indicators of all Crédit
Agricole CIB Group entities and 2.2.C degree indicators on a consolidated basis;
|
| ― |
production of 2.2 control indicators for essential outsourced
accounting services
provided by Crédit Agricole CIB for other entities of the Crédit Agricole Group;
|
| ― |
drafting of an Accounting and Financial Information Scoreboard
for the Crédit Agricole
CIB Group for the year ended 31 December of the previous year, thus assessing the
proper functioning of the accounting control system for the published financial information.
The Accounting Control and Financial ensures the implementation of action plans if
needed. This Scoreboard is presented to Crédit Agricole CIB's Executive Management
within the framework of its top-level Permanent Control Committee. Accounting control
indicators and their evolutions are presented, at least twice a year before this same
Committee;
|
| ― |
ad hoc controls of all information within the scope of Permanent
Accounting Control
and of all publishable financial information;
|
| ― |
thematic on-the-spot and document controls: an annual control
plan is defined. This
plan is validated during a top-level Permanent Control Committee meeting. The summary
and conclusions of these thematic controls are presented each year during the June
and December top-level Permanent Control Committee meetings. In 2018, the specific
controls carried out related to:
i. the biannual review of dormant (inactive) accounts - clients and charts of accounts,
of Crédit Agricole CIB France;
ii. second-degree, second-level annual review of second-degree,
first-level accounting
controls.
|
♦ Regulatory capital
requirements
Within the framework of Basel II regulations, Crédit Agricole CIB uses an approach
based on internal models approved by the regulator for calculating capital requirements
with respect to Credit and market risks as well as operational risk.
These patterns are part of the risk management device of Crédit Agricole CIB, they
are monitored and reviewed on a regular basis to ensure their effective performance
and use.
Concerning the credit risk, the LGD project finance, LGD Banks, PD and LGD funds
and
RW bad debts credit models were re-calibrated during 2018. Prior notification was
sent to the European Central Bank (ECB) before implementation of these models in our
information systems. Moreover, all PD and LGD models were backtested during 2018.
The results of this work will be presented to the Crédit Agricole CIB Executive Committee
in the first quarter of 2019 and then to the Crédit Agricole S.A. Standards and Methodologies
Committee. Further, our internal scores were benchmarked for the Low Default Portfolio
(Large Corporates, Banks and Sovereigns) and in relation to the ratings of external
agencies and those of other European banks involved in the annual RWA benchmarking
exercise organised by the European Banking Authority (EBA).
It should be noted that the changes to our existing models and the development
of
new models are intended first to measure our risks as accurately as possible, and
second to accompany the regulatory changes that apply to banks.
Correct application of the Basel system is regularly monitored by a Basel Requirements
Review Committee. In 2019, the RCP/MRP teams will continue to work on:
i. the Basel text published on 7 December 2017 on the usage constraints of the
internal
models.
ii. The preparation of the ECB audit referred to as TRIM (Targeted Review of Internal
Models) on credit risk.
♦ The Finance
Department: control system for accounting and financial information,
global interest rate and liquidity risks
ROLES AND RESPONSIBILITIES
FOR THE PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL
INFORMATION
In accordance with the Group's current rules, the roles and organisational principles
of the Finance Department's functions are described in an organisational memo updated
in 2018.
Within the Finance Department of Crédit Agricole CIB, Group Financial Control is
in
charge of drawing up the financial statements (the individual accounts of Crédit Agricole
CIB, the consolidated financial statements for the Crédit Agricole CIB Group, and
regulatory statements for the Company and for the Group). The Department is also responsible
for giving Crédit Agricole S.A. all of the data needed to prepare the consolidated
accounts of the Crédit Agricole Group.
The Finance Departments of the entities that fall within the scope of consolidation
are responsible for drawing up their own financial statements by local and international
standards. They operate within the framework of the instructions and controls of the
Head Office's Finance Department.
PROCEDURES FOR
THE PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION
The organisation of IT procedures and systems used for the preparation and processing
of accounting and financial information is provided in procedure manuals and in an
accounting risks mapping updated annually. The Finance Department also oversees the
consistency of the architecture of the financial and accounting information systems
and ensures the monitoring of the major projects in which they are involved (accounting,
regulatory, prudential, liquidity). 2018 saw the start of production of the Base Mondiale
Finance which centralises the accounting and financial information of subsidiaries
and branches to produce the consolidated financial statements of the Crédit Agricole
CIB Group.
ACCOUNTING DATA
Crédit Agricole CIB closes its accounts monthly. Parent company and consolidated
financial
statements are established using the Crédit Agricole Group's accounting standards,
which are circulated by Crédit Agricole S.A.'s Accounting and Consolidation Department.
The accounting treatment of complex instruments and transactions undergoes prior analysis
by the Accounting Standards unit of Crédit Agricole CIB's Finance Department. Since
1 January 2018, the Crédit Agricole CIB Group has been preparing its financial statements
in accordance with IFRS 9. The procedure for preparing the financial statements under
this new framework and the effects of first-time application have been reviewed by
the Statutory Auditors Each Crédit Agricole CIB Group entity produces a consolidation
package which is used to populate the general Crédit Agricole Group system managed
by Crédit Agricole S.A. Group Financial Control issues quarterly closing instructions
to the Finance Departments of Crédit Agricole CIB entities to define the reporting
schedules and to specify certain accounting treatments and the type of information
to be collected over the period, particularly with a view to preparing the notes to
the consolidated financial statements.
MANAGEMENT DATA
Most financial information published by Crédit Agricole CIB is based on accounting
data and on management data.
All management data is checked to ensure that it has been properly reconciled with
the accounting data and that it complies with the management standards set by the
governance bodies.
Each entity reconciles the main items of its management results with the intermediate
income statement balances produced from accounting data. Group Financial Control checks
that the sum of business-line results equals the sum of entity results, which must
in turn be equal to the Crédit Agricole CIB Group's consolidated results. This check
is made easier by the fact that the analytical unit (profit centre) is integrated
within the entities' accounting information system.
Management data are prepared using calculation methods that ensure they are comparable
over time. When published data are not extracted directly from accounting information,
the sources and definition of calculation methods are generally mentioned to facilitate
understanding.
DESCRIPTION OF
THE PERMANENT ACCOUNTING CONTROL SYSTEM FOR ACCOUNTING AND FINANCIAL
INFORMATION IN THE FINANCE DEPARTMENT
The Finance Department ensures the second-degree, first-level supervision of the
permanent
accounting and financial information control system worldwide. To do so, a dedicated
permanent control team independent from the financial statements' production teams
is made up.
Accounting permanent controls are intended to provide adequate protection against
the major accounting risks that may damage the quality of accounting and financial
information in terms of:
| ― |
compliance of the data with laws, regulations and Crédit Agricole
Group standards;
|
| ― |
reliability and accuracy of the data, allowing a true and fair
view of the results
and financial condition of Crédit Agricole CIB and entities within its scope of consolidation;
|
| ― |
security of the data preparation and processing methods, limiting
operational risks
with respect to Crédit Agricole CIB's commitments regarding published information;
|
| ― |
prevention of fraud and accounting irregularities.
|
To meet these objectives, the Finance Department:
| ― |
has deployed the key accounting indicators defined by Crédit
Agricole S.A. uniformly
across all accounting departments of Crédit Agricole CIB's head office, branches and
subsidiaries;
|
| ― |
consults the Group's branches and main subsidiaries quarterly
via an accounting certification
questionnaire in which the Heads of Finance commit to adhere to accounting standards;
|
| ― |
examines documents based on a control plan validated by the Internal
Control Committee
and coordinated with that of the Risk Management Department;
|
| ― |
conducts an annual review of the mapping of accounting risks.
|
The conclusions of their work as well as the proactive monitoring of recommendations
issued by the regulator and Group Control and Audit enable the Permanent Control to
define any remedial measures needed to strengthen, as necessary, the system for preparing
and processing accounting and financial information.
All of these elements are presented on a quarterly basis in Internal Control Committee
of the Finance Department.
The permanent control of accounting and financial information also applies to the
information produced by Crédit Agricole CIB on behalf of Group entities (Crédit Agricole
S.A. and LCL).
RELATIONS WITH
THE STATUTORY AUDITORS
In accordance with French professional standards, the Statutory Auditors examine
significant
accounting choices and implement procedures they deem appropriate on published financial
and accounting information:
| ― |
audit of the parent company and consolidated financial statements;
|
| ― |
limited review of the interim consolidated financial statements;
|
| ― |
review of all published financial information.
|
As part of their statutory assignment, the Statutory Auditors submit the conclusions
of their work to Crédit Agricole CIB's Audit Committee and Board of Directors. They
also point out the significant weaknesses of the internal control concerning the procedures
relating to the production and treatment of the accounting and financial information.
Since 2016, in the context of implementing audit reform, the Finance Department,
on
delegation by the Audit Committee, approves any services other than the audit. The
fees paid to the Statutory Auditors and the auditors' independence are discussed quarterly
during Audit Committee meetings.
FINANCIAL COMMUNICATION
Crédit Agricole CIB contributes to Crédit Agricole S.A. financial communication's
reports published for shareholders, investors, analysts or rating agencies. The financial
and accounting information for the CIB activities of Crédit Agricole CIB in those
reports is prepared by the financial communication section of the Finance Department.
It is consistent with that used internally and validated by the Statutory Auditors
and presented to the supervisory body of Crédit Agricole CIB.
GLOBAL INTEREST
RATE RISK
To measure the global interest-rate risk, Crédit Agricole CIB uses the statistical-gap
method, by calculating an interest-rate gap, and draws up stress scenarios. The interest-rate
gaps and the results of the stress tests are presented to the ALM Committee which
decides on the management and/or hedging measures to be taken. The tool which automates
RTIG processing and completes the "Balance Sheet Clean Up" process now relies on the
Base Mondiale Finance.
LIQUIDITY RISK
The management of liquidity risk within the Crédit Agricole CIB Group has been
placed
under the responsibility of the Finance Department's Asset-Liability Management (ALM)
section, which reports to the ALM Committee.
The existing system for management and control of the risks of illiquidity, availability
and prices mainly concerns:
| ― |
the resilience to financial crises in systemic, idiosyncratic
and global risk scenarios
over 12 months, 3 months and 1 month;
|
| ― |
the exposure to short-term market refinancing (short-term limit);
|
| ― |
the concentration of long-term refinancing maturities;
|
| ― |
the medium and long-term liquidity gap for all currencies and
US dollar liquidity.
|
Crédit Agricole CIB has a liquidity risk management platform linked to the Bank's
accounting data, which measures regulatory liquidity ratios and Internal Liquidity
Model indicators.
The main advances made during 2018 in liquidity risk management are the following:
| ― |
Improved prospective monitoring of the Business Lines' liquidity
consumption
|
| ― |
Updating of the 2019-2022 liquidity trajectory as part of the
Medium-Term Plan
|
| ― |
Continuing to improve the reliability of the daily LCR signal
Regarding liquidity,
the Permanent Control procedure of Crédit Agricole CIB is similar to that of the Group.
The minimum control indicators are the same and apply to all major processes in the
same way.
|
♦ "Global Compliance"
department
The roles and organisation of compliance are outlined below in part 8. Non-compliance
risks.
♦ "Legal" department
The Legal Department's main duties include managing legal risk within Crédit Agricole
CIB in accordance with the Decree of 3 November 2014, and providing the necessary
support to business lines and support functions to enable them to operate with minimal
legal risk, the mandate and monitoring of the relations with the Bank's external legal
consultants and the implementation of an alert system in case of a negative or qualified
opinion (opinion issued in terms of market transactions by which the Legal function
discourages completion of the market transaction in question and indicates the legal
risks taken by the Bank if this opinion is not taken into account).
The Head of Crédit Agricole CIB's Legal Department reports back on the work of
the
Legal Function to the Group's Legal Head and functionally to the Deputy Chief Executive
Officer of the Bank responsible for Support Functions.
The Head of the Legal Department has hierarchical or functional authority, as the
case may be, over head office legal officers and the legal officers of Crédit Agricole
CIB Group entities, and over local legal officers.
The Legal Function's (LGL) permanent control and legal risk management system fall
within the framework defined by Crédit Agricole CIB and Crédit Agricole S.A.
The Legal Function contributes to ensure that the Bank's business activities and
operations
comply with the applicable laws and regulations. It performs permanent controls on
legal risks arising from Crédit Agricole CIB's activities, products, services and
transactions, along with the operational risks generated by the Legal function itself.
It also provides legal consultations to Business Lines and Support Functions, involvement
in legal negotiations of transactions, legal watch operations, staff training, standard
contract modelling, legal policies and procedures issuing, the collaboration to decision-making
bodies and procedures as required by the Bank's governance rules. The Legal function
systematically takes part in the process of approving new products and activities
and in major lending decisions.
In 2018, the Legal function continued to improve its permanent control and legal
risk
monitoring system, in particular through the following actions:
| ― |
updating of the permanent control KIT for Permanent Control correspondents
in the
Legal function abroad;
|
| ― |
updating of its operational risk mapping, with the extension
of some processes identified
by the Legal Function to the Private Banking activities;
|
| ― |
updating of its control plan, with a review of controls on external
legal costs and
the implementation of controls on Private Banking activities;
|
| ― |
Integration of Private Banking activities (see update of the
operational risk mapping
and the plan for control and participation of the Wealth Management legal head in
the Executive, Internal Control and Permanent Control committees of the Legal Function);
|
| ― |
Implementation of the latest extant recommendations, issued during
the audit on the
Legal Function which took place in early 2015;
|
| ― |
Completion of the project to aggregate and automate performance
and management indicators,
quantitative and qualitative, produced monthly for the Management of LGL and of the
Bank and of the Group's Legal Head.
|
| ― |
Extension of the production of these indicators to the work of
legal experts reporting
to the Legal Manager of the EMEA regional centre;
|
| ― |
Completion of the roll-out in all countries of the EMEA regional
centre and in Brazil
of the MMS/E-Billing tool to manage files and external legal costs;
|
| ― |
Creation of a legal team responsible for advising the Bank globally
on penalties and
financial crime;
|
| ― |
Recruitment of specialist legal experts on the Paris-London platform
responsible for
advising the Bank on competition law;
|
| ― |
Continuation of the Innovation project, which is one of the five
pillars of the 2020
MTP for the Legal Function.
|
♦ Information
System Security and Business Continuity Plan
The protection of the IT system and ability to overcome a large-scale accident
are
essential to defending the interests of Crédit Agricole CIB. Two units dedicated to
processing issues related to information security and business continuity have therefore
been set up; one within ISS (Information Systems Security), and the other in the Operations
& Country COOs (OPC) department: BCP (Business Continuity Plan).
In order to fulfil their permanent control missions, they rely on a network of
correspondents
in France and abroad.
ISS CHANNEL
As regards information security, ISS determines the governance, rules (Safety of
Information
Systems Policies), coordinates maintenance of a suitable security level, ensures correct
implementation of ISP systems, management of environments enabling identity control
and authorisation management standards, definition of safety standards, safety scans
and audits. ISS also acts as an IT safety manager on behalf of Crédit Agricole S.A.
on environments that serve Crédit Agricole S.A., in relation with the CISO of that
entity. Moreover, systems and applications connected to the Internet and internal
servers vulnerable to fraud are covered by special, large-scale verifications. ISS
also co-ordinates periodic reviews of employees' access rights to sensitive applications.
2018 mainly saw the continuation of the implementation of the Information System
Safety
master plan, called CARS Crédit Agricole CIB. This plan includes all the initiatives
to boost security specific to Crédit Agricole CIB, as well as the CA Group's initiative
in response to the critical Expected Results of the CARS plan.
The main achievements can be summarised as follows:
| ― |
Introduction of new tools to monitor level 1 and 2.1 controls
|
| ― |
DRP tests with end-to-end application validations (fictitious
transaction)
|
| ― |
Improvement of our anti-Phishing capabilities on internet communication
channels (advanced
analysis of emails),
|
| ― |
Default locking of USB ports (with exceptional opening process)
|
| ― |
Continued securing of shared storage space for computer files;
|
| ― |
Protection of generic accounts with high privileges by using
specialist equipment
for firewalling access codes and managing the raising of privileges;
|
| ― |
continuation of the DLP (Data Leak Prevention) project, roll-out
throughout the Asia
region, on messaging, web and endpoint channels
|
| ― |
Raising awareness of employees
|
| ― |
Crisis management exercise involving all of the Bank's local
information system security
officers;
|
| ― |
Reminders of security rules, Phishing drills (all departments,
all users in France),
cyber attack management drills, etc.,
|
| ― |
Monitoring of MARLY 31 indicators (ACPR recommendations for IT
security) via permanent
control plans.
|
| ― |
Re-certification campaigns for all access by all employees by
managers (100%)
|
| ― |
Deployment of strong authentication for New York Windows sessions,
deployment underway
for integration in Swift (completion in March 2019)
|
| ― |
Introduction of a new platform to manage the identities and authentication
to replace
the former architecture
|
2019 will see completion of the CARS plan initiated by the Group in early 2017.
This
plan includes the regulatory aspect to which Crédit Agricole CIB is subject in France,
for which the implementation date is 31/12/2019. Additional actions will also be determined
in 2019 for implementation in 2020 for Crédit Agricole CIB, mainly to improve the
main administration networks. This plan will also integrate the Financial and Strategic
Steering of international regulatory sites concerning ISS. The deployment of DLP solutions
will continue with a view to finalising the Europe region, including France.
BCP
In business continuity matters, the BCP Division defines the governance and business
continuity policies for the entire Group. For the head office, the BCP Division introduces
redundancy to ensure business recovery within the time required by the business lines
in the event of an incident. It acts to support its correspondents in the international
network to ensure the introduction of business continuity systems according to standards
defined at head office. Yearly tests check Crédit Agricole CIB's recovery capacity
both in France and internationally.
The goals of these systems are to ensure employee security, by adopting special
protective
measures, and to ensure the continuity of the Bank's essential activities. An annual
assessment makes it possible to verify the effectiveness of the business continuity
system. The BCP Division reports on Crédit Agricole CIB's level of security to a quarterly
committee which is chaired by the Deputy Chief Executive Officer responsible for Support
functions.
The main achievements in 2018 at the head office focused on:
| ― |
testing the solution for connecting remotely to address the Extreme
BCP scenario (232
testers registered);
|
| ― |
employee awareness-raising sessions (x 15) on BCP - in total
almost 600 people took
part;
|
| ― |
production tests on fall-back sites for a day for all activities
concerned
|
| ― |
a review of the sizing of the fall-back system through the BIA
campaign;
|
| ― |
IT recovery tests with the stoppage of one Datacentre, recovery
on the emergency DC,
and end-to-end processes (X 7), to ensure the correct functioning of all the applications
associated with these processes
|
| ― |
Introduction of a new crisis communication tool at Crédit Agricole
CIB (Send Word
Now) in all Group entities
|
| ― |
Continuing tests on market activities on the new dedicated site.
|
Abroad:
| ― |
review and monitoring of local BCP systems, participation in
local tests, awareness-raising
initiatives;
|
| ― |
scenario simulation exercises involving local crisis cells;
|
| ― |
continuation of the cross BCP study (in the event of inaccessibility
of the production
and fall-back sites) between Paris and London on the part of market activities and
extension of the cross BCP on the other sites for vital activities;
|
| ― |
redesign of the control flags.
|
| ― |
increased tests during "production" days
|
| ― |
introduction of remote access solutions in an increasing number
of entities in the
international network
|
In terms of outsourcing projects (outsourcing, cloud, etc.), BCP is involved in
defining
and validating the service providers' backup solutions.
| ― |
No major incident took place in 2018. Like each year, some minor
incidents led teams
to activate the BCP: snowstorms in Paris and NY, network incident in Spain, hurricane
or typhoon alerts elsewhere.
|
The main objectives for 2019 will be:
| ― |
To continue the Cross BCP study at the entity level, including
head office
|
| ― |
To adapt the BCP system to market activities according to the
evolution and scale
of activities in France (Brexit effect, medium-term strategy, etc.);
|
| ― |
The upgrade of the BCP system of HKG market activities;
|
| ― |
homogenisation of BIA (Business Impact Analysis) processes, particularly
on the criticality
of activities and applications
|
| ― |
continued awareness and communication actions involving all of
the Bank's employees
|
| ― |
Review of the system to test the IT Backup Plan in partnership
with GIT, particularly
with the improvement of our backup solutions in response to scenarios of Software
Unavailability of the IS (ILSI) and Mass Unavailability of Workstations (IMPT).
|
THIRD DEGREE CONTROLS
♦ Periodic control
The Group Control and Audit performs periodic control of Crédit Agricole CIB within
all entities falling under its consolidated supervision perimeter. The Group had 159
audit personnel, 76 of whom were based at head office at the end of 2018.
As a third line of defence, the Group Control and Audit:
| ― |
carries out a diagnostic on the control mechanisms referred to
in Article 13 of the
decree of 3 November 2014 above, and on those ensuring the reliability and accuracy
of the financial, management and operational information of the areas audited,
|
| ― |
ensure that the actual risk level is controlled (identification,
recording, control,
hedging), particularly credit, market and exchange rate risks, liquidity, global interest
rate-risk, intermediation risk, payment-delivery risk, and of the various components
of operational risk, including the risk of internal or external fraud, the risk of
discontinuation of operations, legal and non-compliance risk and those newly mentioned
in the aforementioned decree (basis risk, dilution risk, securitisation risk, systemic
risk, model risk and excessive leverage risk),
|
| ― |
ensure compliance of the transactions,
|
| ― |
ensure procedures are followed,
|
| ― |
ensure correct implementation of the corrective measures decided
upon,
|
| ― |
assess the quality and effectiveness of operations.
|
Crédit Agricole CIB's Group Control and Audit is part of the Internal Audit Business
Line (LMAI) of the Crédit Agricole S.A. Group. Therefore the Crédit Agricole CIB Group
Control and Audit reports directly to the Crédit Agricole S.A. Group Control and Audit
and functionally to the Crédit Agricole CIB Deputy Chief Executive Officer. The Group
Control and Audit benefits from unrestricted access to the Crédit Agricole CIB Executive
Management and the Risk and Audit Committees of the Board of Directors. Moreover,
Group Control and Audit has no responsibility or authority over the activities they
control, which guarantees their independence.
To do its work, Group Control and Audit is structured into global business lines.
The IGE are based at head office and some international entities and/or subsidiaries.
All Crédit Agricole CIB internal audit teams report hierarchically to Group Control
and Audit, unless prohibited by local legislation or regulations, in which case the
local internal audit is functionally supervised by IGE.
IGE is divided into three teams, the Managers of which report directly to Group
Control
and Audit: a global Audit team, a Methods and Support team and a manager for relationships
with supervisors and control authorities.
During the 2018 financial year, Internal Audit missions pertained to various entities
and units in France and abroad through specific mission (concerning an entity or subsidiary),
business line reviews and missions of the thematic or cross-departmental type, including
IT and regulatory audits. Group Control and Audit also carries out specific missions
at the request of Crédit Agricole CIB's Executive Management, its Risk Committee or
Group Internal Audit.
Auditing work essentially stems from the annual audit plan set using an updated
risk
mapping approach as well as information provided by the Chief Executive Officer, the
other control functions, the Crédit Agricole CIB statutory auditors, the risk and
audit committees of the Board of Directors, as well as the objectives of the Executive
Management in terms of internal control and the instructions of the Board of Directors.
Group Control and Audit submits the annual audit plan to the approval of the Chief
Executive Officers of Crédit Agricole CIB and of the Crédit Agricole Group Control
and Audit, and for the approval of the Risk and Audit Committees of the Board of Directors.
The audit plan is then presented to the Board of Directors and the Internal Control
Committee.
For work with a global scope or that whose conclusions are deemed globally relevant,
a summary is sent to the Chairman of the Crédit Agricole CIB Board of Directors, the
Executive Management of Crédit Agricole CIB and the Crédit Agricole Group Control
and Audit. A summary of the main conclusions of the audit reports is presented to
the Risk Committee and the Crédit Agricole CIB Board of Directors by the Group Control
and Audit or its representative, and to the Board of Directors and/or the internal
control committees of the controlled departments, as relevant.
The work of the Group Control and Audit or any external control audit is subject
to
a formalised system following recommendations. The progress made in implementing the
recommendations is monitored by the Group Control and Audit:
| ― |
At least twice a year during half yearly monitoring work,
|
| ― |
During thematic monitoring of audit assignments, or as part of
investigations conducted
as part of a planned audit,
|
| ― |
On the request of the department undergoing the audit via an
"open counter" process,
in close partnership with its permanent Controller. This process enables the progress
of the action plans between two half-yearly audits to be recorded.
|
Ad hoc committee meetings to follow up on the recommendations by business line
were
also held in 2018 in the presence of Executive Management, Internal Audit, the head
of the department, business line or support function, along with its permanent controller.
They aim to review the state of progress of implementation of the most sensitive recommendations.
The results of the follow-up of the recommendations are presented to Crédit Agricole
CIB's Internal Control Committee. If necessary, this process leads the Internal Auditor
to exercise his duty to alert the Board of Directors pursuant to Article 26 b) of
the Decree of 3 November 2014.
In accordance with the organisational arrangements shared with the entities of
the
Crédit Agricole Group, described above, and with the arrangements and procedures within
Crédit Agricole CIB, the Board of Directors, the Executive Management and Crédit Agricole
CIB's relevant units are given detailed information about the internal control and
risk exposure, the progress made in these areas, and the state of implementation of
the adopted remedial measures, as part of an ongoing improvement approach. This information
is contained in the Annual report on internal control, risk measurement and risk supervision,
but also in regular reporting documents covering business activities, risk and control.
2.4 CREDIT RISKS
A credit risk occurs when a counterparty is unable to fulfil its obligations and
when
the book value of these obligations in Crédit Agricole CIB Group's records is positive.
The counterparty may be a bank, an industrial or commercial corporate, a government
or government entity, an investment fund or an individual.
The exposure may be a loan, debt security, deed of property, performance exchange
contract, guarantees given, unused confirmed commitment or market transactions. The
risk also includes the settlement risk inherent in any transaction entailing an exchange
of cash or physical goods outside a secure settlement system.
2.4.1 Objectives
and policy
Risk-taking in Crédit Agricole CIB is done through the definition of risk strategies
approved by the Strategy and Portfolio Committee (CSP), chaired by Executive Management.
The risk strategies are set for each country, business/product line or sector carrying
a significant risk for the Bank within the scope of control of Crédit Agricole CIB.
They aim to define the principal risk guidelines and to establish the risk budgets
within which each business line or geographical entity must conduct its activities,
and cover: industrial sectors included (or excluded), type of counterparty, nature
and duration of transactions and activities or authorised product types, category
or intensity of risks incurred, existence and value of guarantees, overall portfolio
volume, definition of individual and overall risk level, diversification criteria.
By establishing a risk strategy for each scope deemed significant by Crédit Agricole
CIB, the Bank is able to define its risk appetite and quality criteria for the commitments
that it subsequently makes. It also prevents from excessive concentrations and it
leads to a risk diversification of the portfolio profile.
Concentration risks are managed by using specific indicators for certain portfolios
that are taken into account when granting loans (individual concentration grid). Concentrations
are then monitored a posteriori for the affected portfolios, by analysing the quantitative
measure assigned to this use, based on the Bank's internal model.
Finally, an active portfolio management is done within Crédit Agricole CIB to reduce
main concentration risks and also to optimise its uses of shareholders' equity. The
FIN/EXM uses market instruments such as credit derivatives or securitisation mechanisms
to reduce and diversify counterparty risks. The management of credit risk using derivatives
is based on the purchase of credit derivatives on single exposures (see "Information
under Pillar 3 Basel III" Credit risk - Use of credit derivatives section). Use of
the securitisation mechanism is described in the "Information under Pillar 3 Basel
III" Securitisation section. Similarly, credit syndication with external banks and
the attempt to hedge risks (credit insurance, derivatives, MRPA etc.) are other solutions
which could be used to mitigate concentrations.
In particular, with respect to counterparty risk on market transactions, the group's
policy on credit reserves constitution is twofold. On sound clients, a credit valuation
adjustment ("CVA risk assessment") is recorded and consists in a generic provisioning,
as for credit risk. Conversely, on defaulted counterparties, an individual provision
is sized in accordance with the derivative instrument situation, taking into account
the CVA amount already provisioned prior to the default.
In case of default, the depreciation is assessed in accordance with the same principles
as those governing the credit risk provisioning policy: expected loss amount depending
on the derivative instrument rank in the waterfall, taking into account the CVA process,
with two possible outcomes: either derivatives are left in place (CVA or individual
provision), or they are terminated (individual write-off).
2.4.2 Credit risk
management
GENERAL PRINCIPLES
OF RISK-TAKING
Credit decisions depend on the upstream risk strategies that are defined above.
Limits are set for all counterparties and groups of counterparties, in order to
control
the amount of commitments, whatever the type of counterparty (corporate, sovereign,
banks, financial institutions, local authorities, SPVs, etc.). Authorisations vary
according to the quality of the risk, assessed by an internal rating of the counterparty.
The credit decision must form part of the formally approved risk strategies. Second
level controls on compliance with limits are performed by the "Risk and Permanent
Control" Department, supplemented by a process for monitoring individual and portfolio
risks, notably to detect any deterioration in the quality of counterparties and Crédit
Agricole CIB's commitments as early as possible.
Where the risk is substantiated, a collective and specific impairment policy is
put
into effect.
New transactions are approved according to a decision-making process based on two
front office signatures, one from a collaborator authorised to make such a request
and the other from a delegate empowered to make a credit decision.
The decision is supported by an independent opinion by the RPC approved by an authorised
RPC signatory and must take Basel II parameters into account, including the internal
rating of the counterparty and the predictive Loss Given Default (LGD) attributed
to the proposed transactions. A calculation of ex ante profitability must also be
included in the credit file. In the event that the risk management team's opinion
is negative, the decision making power is passed up to Front Office delegate who chairs
the immediate higher committee.
► Comparison between
internal ratings and the rating agencies
| Groupe Crédit Agricole |
A+ |
A |
B+ |
B |
C+ |
C |
| Indicative Moody's rating equivalent |
Aaa |
Aa1/Aa2 |
Aa3/A1 |
A2/A3 |
Baa1 |
Baa2 |
| Indicative Standard & Poors' rating equivalent |
AAA |
AA+/AA |
AA-/A+ |
A/A- |
BBB+ |
BBB |
| Groupe Crédit Agricole |
C- |
D+ |
D |
D- |
E+ |
E |
| Indicative Moody's rating equivalent |
Baa3 |
Ba1 |
Ba2 |
Ba3 |
B1/B2 |
B3 |
| Indicative Standard & Poors' rating equivalent |
BBB- |
BB+ |
BB |
BB- |
B+/B |
B- |
| Groupe Crédit Agricole |
E- |
| Indicative Moody's rating equivalent |
Caa/Ca/C |
| Indicative Standard & Poors' rating equivalent |
CCC/CC/C |
MÉTHODOLOGIES
AND SYSTEMS TO MEASURE AND EVALUATE RISK
♦ Internal rating
system
The internal rating system covers all methods, procedures and controls used to
calculate
credit risk, borrower ratings and loss given default figures for all of our exposures.
In 2007, Crédit Agricole CIB received authorisation from the French Regulatory
and
Resolution Supervisory Authority (ACPR) to use its internal credit risk rating system
to calculate regulatory capital requirements.
The methods used cover all types of counterparty and combine quantitative and qualitative
criteria. They are devised using the expertise of the various financing activities
within Crédit Agricole CIB, or within the Crédit Agricole Group if they cover customers
shared by the whole Group. The rating scale has 15 notches. It has been established
on the basis of a segmentation of risk so as to provide a uniform view of default
risk over a full business cycle. The scale comprises 13 ratings (A+ to E-) for counterparties
that are not in default (including 3 ratings for counterparties that have been placed
under watch) and 2 ratings (F and Z) for counterparties that are in default.
The relevance of ratings and reliability of data used are secured by a process
of
initial validation and maintenance of internal models, based on a structured and documented
organisation applied to the Group and involving the entities, the Risk and Permanent
Control Department and the Audit-Inspection business line.
All internal models used by Crédit Agricole CIB were the subject of a presentation
to the Standards and Methodology Committee (CNM) for approval before internal validation
by the Control and Audit function. They were also the subject of a validation by the
ACPR on 1 January 2008. Furthermore, each change in the internal model is now subject
to an audit by the validation team within the Group Risk Management Department before
being presented to the CNM for approval.
Corporates' internal rating is followed according to a system common to Crédit
Agricole
Group; guaranteeing a uniform rating throughout the Group and enabling to share backtesting
work for common customers.
Crédit Agricole CIB has ensured that the risk parameters required by Basel II,
allowing
the calculation of capital requirements, are used as part of the Bank's internal management.
They are used by all people involved in the process of granting loans and measuring
and monitoring credit risks.
The data used for granting loans and determining ratings is monitored every two
months
by a Basel Requirements Review Committee. This committee, coordinated by the Risk
Management Department and representatives of all business lines take part in it, monitors
a set of indicators concerning the quality of the data used for rating purposes, as
well as the calculation of other Basel II parameters when granting loans, such as
loss given default (LGD), credit conversion factor (CCF), risk reduction factor (RRF),
etc. The committee helps business lines apply Basel II requirements and, if necessary,
to take remedial action when discrepancies arise. It provides important help in checking
that the Basel II system is used properly by the business lines.
♦ Backtesting
Backtesting aims to ensure the robustness, performance and predictive power of
the
Bank's internal models over time. This exercise also helps detecting significant changes
in the structure and behaviour of portfolios and clients. It then leads to adjustment
decisions adjustment, or even recast, of models in order to take into account these
new structural elements.
On the backtesting of PD parameter, the following analyses are carried out:
| ― |
consistency between observed "through the cycle" (TTC) default
rates and the master
scale PDs (based on the calculation of a confidence interval around the TTC default
rate);
|
| ― |
analysis of defaults (including discriminating power and more
qualitative analysis
in the case of low default portfolios (LDP));
|
| ― |
stability of ratings over time (both in terms of distribution
of the portfolio's ratings
and of one-year transitions of the portfolio's ratings);
|
| ― |
analysis of the model parameters (analysis of variables involved
in determining ratings,
correlations, changes to various intermediate ratings, etc.).
|
The main goal of the LGD backtesting performed is to regularly compare for all
LGD
models in IRBA:
| ― |
predictive LGDs: LGDs assigned by the internal model to transactions
that constitute
the Crédit Agricole CIB portfolio, on a given date;
|
| ― |
and the historic LGDs:
| ― |
LGDs derived from recovery histories following default, for closed
and open files
whose maturity is in excess of the maximum recovery period;
|
| ― |
LGDs calculated using recovery histories following default and
estimated future recoveries,
for open files whose maturity is below the maximum recovery period.
|
|
The risk horizon set by the regulator is one year; the predicted LGDs associated
with
the transactions should therefore be compared, one year prior to default, with the
historic LGDs.
The nature of LGD models and the volume of defaults being different for each LGD
scope,
LGD backtesting studies are adapted to each scope. At least, the LGD backtesting of
a scope will compare the predictive and historical LGD quantitatively and or qualitatively
according to volume.
There are three main types of LGD scopes detailed as follows:
| ― |
the scope of specialised financing: concerning the financing
of assets (Aeronautics,
Real Estate/Hotels, Rail and Shipping), predictive LGD is obtained from a theoretical
model based on the diffusion of asset values, unlike project financings, transactional
trading and structured commodities, for which predictive LGD is obtained from a grid
specific to each model and based on the quality of the sponsor, the asset liquidity,
the goods' claim phases or the final buyer;
|
| ― |
the scope of unsecured corporate, bank and sovereign financing:
the predictive LGD
is obtained using an LGD grid specific to each scope (corporate, bank, insurance,
etc.) involving third-party variables such as the business sector, the level of turnover,
the risk country, etc.;
|
| ― |
the scope of secured corporate, bank and sovereign financing:
the predictive LGD is
obtained by applying Risk Reduction Factors to the part covered by a personal guarantee
or by collateral and using the unsecured LGD grids for the non-covered part.
|
As such, the backtesting of default rates performed on Crédit Agricole CIB's Large
customer portfolio in 2018 underlines the relevance of the PD models. The one-year
estimated PD is confirmed by the default rates actually observed over the period in
question, even greater.
|
|
Estimated PD |
Observed default rate |
| Corporates |
1.01% |
0.82% |
| Banks |
0.77% |
0.12% |
For models under its responsibility, Crédit Agricole CIB reports back to the Group
annually on the backtesting results, through the Validation Technique Committee on
the one hand and the CNM on the other, thus confirming the proper application of the
selected statistical methods and the validity of the results. The summary document
recommends, where necessary, appropriate corrective measures (methodology review,
recalibration, training effort, control recommendations, etc.).
CREDIT RISK MEASUREMENT
The measurement of credit risk exposures includes both drawn facilities and confirmed
unutilised facilities. To measure counterparty risk on capital markets transactions,
Crédit Agricole CIB uses an internal method for estimating the underlying risk of
derivative financial instruments such as swaps and structured products. Counterparty
risks on capital market activities are assessed for potential risk linked to fluctuations
in the market value of derivative instruments for the remainder of their life. This
is determined according to the nature and remaining maturity of agreements, based
on a statistical observation of changes to underlyings. When the netting and collateralisation
agreements with the counterparty allow, counterparty risk is measured for the portfolio
net of eligible collateral. This method is used for the internal management of counterparty
risks.
To reduce exposure to counterparty risks, the Corporate and Investment business
enters
into netting and collateralisation agreements with its counterparties (see part 2.4
"Credit risk mitigation mechanism").
The figures concerning credit risks are presented in paragraph 2.4.5 of this chapter
and seq. in note 3 of the consolidated financial statements.
PORTFOLIO AND
CONCENTRATION RISKS
Decision-making and individual risk monitoring within Crédit Agricole CIB are backed
up by a portfolio risk monitoring system that enables the Group to assess counterparty
risks for its overall portfolio and for each of the constituent sub-portfolios, according
to a breakdown by business line, sector, geographic zone, or any delineation that
brings out specific risk characteristics in the overall portfolio.
In principle, portfolio reviews are conducted yearly on each significant scope
in
order to check that the portfolio is consistent with the risk strategy in force, to
assess the various segments of the portfolio against one another and against any aspects
of the operating environment or external factors that may be influencing them.
Different tools were implemented to detect any concentration deemed to be excessive
for the entire portfolio, sub portfolios or at a unit level:
| ― |
unit concentration scales were implemented to give reference
points according to the
nature, the size, the rating and the geographic area of the counterparty. They are
used in the granting process, and subsequently applied periodically to certain portfolios
to detect concentrations which may later appear excessive;
|
| ― |
regular monitoring, ad hoc analysis and, when needed, recommendations
for action are
regularly carried out and provided for sectoral and geographical concentrations. Concentration
risks can be taken into account to analyse the risk strategies of the business lines
or geographic entities;
|
| ― |
information is fed back to the Executive Management when necessary
on the concentration
status of the portfolio;
|
Crédit Agricole CIB uses credit risk modelling tools and in particular an internal
portfolio model that calculates risk indicators such as: average loss, volatility
of potential losses and economic capital. Average loss and volatility figures enable
Crédit Agricole CIB to anticipate the average risk-related cost in its portfolio,
and changes therein. Economic capital is an additional measurement of Basel II regulatory
capital, to the extent that it allows a more detailed view of the portfolio through
a correlation model and parameters calibrated using internal data bases.
The internal portfolio model also takes into account the impact of protection (Credit
Default Swaps, securitisations) purchased by Crédit Agricole CIB's Credit Portfolio
Management unit. Finally, it measures the effects of concentration and diversification
within our portfolio. These effects are studied based on individual and geo-sectorial
criteria.
Stress scenarios are the final type of counterparty risk assessment tool. They
are
regularly produced to estimate the impact of economic scenarios (central, adverse)
on some or all parts of the portfolio.
SECTOR RISKS
Crédit Agricole CIB's portfolio is analysed by major industrial sector at regular
intervals. Risks within each sector in terms of commitments, level of risk (expected
loss, economic capital) and concentration are examined.
Concentration is assessed on two levels: idiosyncratic and geosectorial. These
analyses
can be more or less deepened according to the analyst's needs.
Meanwhile, the economic and financial risks of each significant sector are analysed
and leading indicators of deterioration are monitored.
Specific stress scenarios are also prepared when necessary for instance during
the
strategic review of an entity of the Bank.
In the light of these various analyses, measures to diversify or protect sectors
at
risk of deterioration are recommended.
COUNTRY RISKS
Country risk is the risk that economic, financial, political, legal or social conditions
of a foreign country will affect the Bank's financial interests. It does not differ
in nature from "elementary" risks (credit, market and operational risks). It constitutes
a set of risks resulting from the Bank's vulnerability to a specific political, social,
macroeconomic and financial environment.
The system for assessing and monitoring country risk within Crédit Agricole CIB
is
based on an internal rating model. Internal country ratings are based on criteria
relating to the financial soundness of the government, the banking system and the
economy, ability and willingness to pay, governance and political stability.
The limits set at the end of 2011 for all countries with a sufficiently high volume
of business, in line with procedures which are more or less stringent depending on
the country's rating, were introduced in early 2013: country limits are set on an
annual basis for "non investment grade" rated countries and are reviewed every two
years for countries with higher ratings.
In addition, the Bank performs scenario analysis to test adverse macroeconomic
and
financial assumptions, which give an inter grated overview of the risks to which it
may be exposed in situations of extreme tension.
The Group manages and controls its country risks according to the following principles:
| ― |
acceptable country risk exposure limits are determined through
reviews of country
strategies, in accordance with an evaluation of the portfolio's vulnerability to the
country risk. This degree of vulnerability is determined by the type and structure
of transactions, the quality of counterparties and the term of commitments. These
exposure limits may be reviewed more frequently if developments in a particular country
make this necessary. These strategies and limits are validated depending on the issues
in terms of risks by Crédit Agricole CIB's Strategy and Portfolio Committee (CSP)
or Country Risk Committee (CRP) and by Crédit Agricole S.A.'s Risk Committee (CRG)
as well as by Crédit Agricole CIB's Board of Directors;
|
| ― |
country risk is maintained on a regular basis through the production
and quarterly
updating of ratings for each country in which the Group is exposed. Specific events
may cause ratings to be adjusted apart from this schedule;
|
The unit in charge of country risk within the Risk and Permanent Control Department
must issue an opinion on transactions whose size, maturity or degree of country risk
could potentially affect the quality of the portfolio;
| ― |
country risk exposure is monitored and controlled in both quantitative
(amount and
term of exposure) and qualitative (portfolio vulnerability) terms through specific
and regular reports on all country exposures.
|
Sovereign risk exposures are detailed in Note 6.9 to the consolidated financial
statements.
COUNTERPARTY RISK
ON MARKET TRANSACTIONS
Derivatives and repo transactions carried out by Crédit Agricole CIB as part of
its
capital market activities generate a risk of credit by the transaction counterparties.
Crédit Agricole CIB uses internal methods to estimate the current and potential risk
inherent in derivative financial instruments, taking a net portfolio approach for
each client:
| ― |
current risk corresponds to the sum owing by the counterparty
in the event of instantaneous
default;
|
| ― |
potential future risk is the estimated maximum value of Crédit
Agricole CIB's exposure
within a given confidence interval.
|
The methodology used is based on "Monte Carlo" type simulations, enabling the risk
of change over derivatives' remaining maturity to be assessed on the basis of statistical
modelling of the change in underlying market parameters.
The model also takes into account various risk mitigation factors, linked to set-off
and collateralisation contracts negotiated with counterparties during the pretransaction
documentation phase. It also includes exchanges of collateral on the initial margin
for noncleared derivatives, in accordance with the thresholds in force. Situations
of specific risk of unfavourable correlations (risk that an exposure to a derivative
is positively correlated with the counterparty's probability of default as a result
of a legal link between this counterparty and the underlying of the derivative) are
monitored regularly to identify and integrate such risks in the exposure measurement
as recommended by regulations. Situations of general risk of unfavourable correlations
(risk that market conditions have a correlated effect on a counterparty's credit quality
and derivative exposures with this counterparty) are monitored by means of ad hoc
exercises in 2018. The internal model is used to manage internal limits on transactions
with each counterparty and to calculate Basel II Pillar 2 economic capital via the
average risk profile (Expected Positive Exposure) using a global portfolio approach.
As allowed by the regulatory framework, the French Regulatory and Resolution Supervisory
Authority (ACPR) authorised Crédit Agricole CIB as of 31 March 2014 to use the internal
model method to calculate its capital requirements in respect of counterparty risk.
This method uses the model described above to determine Effective Expected Positive
Exposure (EEPE) and is applied to all derivatives. The same method is used to calculate
credit exposure at default for capital requirement purposes to address the risk of
credit value adjustment.
Crédit Agricole CIB uses the standard approach for the calculation of regulatory
capital
requirements in respect of counterparty risk on repo transactions and derivative transactions
by its subsidiaries and the derivative transactions with the central counterparties
(CCP).
Credit risk on these market transactions is managed following rules set by the
Group.
The policy on setting counterparty risk limits is as described in "Credit risk management
General principles of risk taking" on page 181. The techniques used by Crédit Agricole
CIB to reduce counterparty risk on market transactions are described in "Credit risk
mitigation mechanisms" on pages 268 to 269.
Crédit Agricole CIB includes a credit valuation adjustment (CVA) in its calculation
of the fair value of derivative assets. This value adjustment is described in Note
1.2 to the consolidated financial statements under accounting principles and policies
and Note 10.2 on information about financial instruments measured at fair value. The
graphs below show the change in the CVA VaR and the stressed CVA VaR in 2018.
► CVA VaR: 99%
confidence interval, 1 day (€ million)
► Stressed CVA
VaR: 99% confidence interval, 1 day (€ million)
The gross positive fair value of contracts as well as the benefits coming from
compensations
and securities held, and net exposure on derivatives, after the compensation and the
securities' effects, are detailed in Note 6.9 to the consolidated financial statements
concerning the compensation of financial assets.
2.4.3 Dispositif
de surveillance des engagements
MONITORING SYSTEM
The first-degree controls on compliance with the conditions that accompany a credit
decision are carried out by the Front Office. The Risk Management and Permanent Controls
division is in charge of second level controls.
Commitments are supervised for this purpose, and portfolio business is monitored
constantly
in order to identify at an early stage any assets that could deteriorate. The aim
is to adopt practical initiatives as early as possible so as to protect the Bank's
interests.
♦ Commitments
monitoring methods
The main methods used in this monitoring are:
| ― |
day-to-day controls on credit decision compliance, in terms of
amount and maturity
date, for commercial transactions as well as capital market transactions, for all
types of counterparty and all categories of counterparty risk encountered (risk of
change, delivery, issuer, cash, intermediation, initial margin and default funds with
clearing houses for the capital market scope, risk of investment and late payment
for the financing scope, etc.);
|
| ― |
the presentation of detected anomalies at the committee meetings
to which the business
lines and specialised RPC decision making and management departments contribute;
|
| ― |
overruns are monitored and may give rise to corrective measures
and/or special monitoring
with the business lines. The frequency of these committee meetings varies depending
on the scope: bimonthly for the market transactions scope and quarterly for the financing
transactions scope;
|
| ― |
communication to Executive Management of a monthly summary and
a quarterly presentation
to the Internal Control Committee on anomalies for the market scope.
|
♦ A permanent
monitoring of portfolio businesses
Several bodies ensure the permanent monitoring of portfolio businesses, to detect
any possible deterioration or any risk concentration problem as early as possible:
| ― |
monthly "Early warning" meetings are held, which endeavour, by
various means, to identify
early signs of potential deterioration in loans which are healthy but deemed sensitive,
in order to reduce or cover the risk exposure;
|
| ― |
quarterly reviews of major risks are performed, regardless of
the quality of borrowers
concerned;
|
| ― |
a regular search of excessive unit, sector and geographic concentrations
is carried
out;
|
| ― |
a risk situation is established for counterparty risks on market
transactions (variation
risk calculated under normal and stressed market conditions), issuer risks, risks
on bond repos, credit guarantee risks on credit derivatives. Reports on risk management
relating to the unfavourable correlation risk on credit derivatives, equity derivatives,
mandatory repos and equity loans and borrowing are produced. These mappings are presented
and analysed in the committees dedicated to such matters.
|
These steps lead to:
| ― |
changes in internal ratings of counterparties which are, when
needed, classified as
"sensitive cases";
|
| ― |
practical decisions to reduce or cover at-risk commitments;
|
| ― |
possible transfers of loans and receivables to the specialised
recovery unit.
|
♦ Identification
of forbearance measures
Since 2014, Crédit Agricole CIB has identified in its information systems the outstanding
amounts that have been the subject of a "forbearance" measure, as defined in Annex
V of Implementing Regulation 680/2014 of the European Commission as amended. A pre-identification
is made first, during the loan approval process, when Crédit Agricole CIB studies
the clients' requests for credit restructuring. Once the forbearance measure has actually
been implemented, the outstanding amounts subject to the forbearance measure are declared
as such, regardless of their internal rating or their prudential treatment. In the
same way, they are no longer declared as such once it is ascertained, as part of the
approval process (annual or ad hoc review), that they meet the exit conditions defined
in the aforementioned regulation.
Outstanding amounts subject to a forbearance measure are reported in Note 3.1 to
the
consolidated financial statements. A forbearance measure indicates a significant deterioration
in credit risk under IFRS 9. The accounting principles that apply to these outstanding
amounts are specified in Note 1.3 to the consolidated financial statements.
SENSITIVE CASE
MONITORING AND IMPAIREMENT
Sensitive cases, whether cases "under Special Supervision" or bad debts, are managed
on a daily basis within the entities, and enhanced surveillance is carried out on
a regular basis.
This review takes the form of quarterly sensitive case committees chaired by the
Risk
and Permanent Control Manager - Sensitive Cases and Impairment, which carry out an
open examination to classify these cases as sensitive cases and determine whether
they should be transferred to a specialised team (DAS or UGAM for shipping financing)
and the appropriate level of specific impairment which is reported to general management,
which must validate it before being transferred to Crédit Agricole S.A.
The definition of default adopted complies with the provisions of European Regulation
No. 575/2013 of 26 June 2013. Stringent default identification processes and procedures
have been put in place on these bases. These are updated in line with regulatory changes.
STRESS SCENARIOS
Credit stress tests are devised to assess the potential impact the Bank may face
(in
terms of loss, provisioning and capital) in the event of a serious deterioration in
the economic and financial environment.
There are three types of stress test categories:
| ― |
the first aims to reflect the impact of a macroeconomic deterioration
affecting the
whole portfolio in terms of cost of risk, regulatory capital requirements and impact
on the solvency ratio. Such scenario is mandatory in order to comply with the needs
of a strengthened prudential supervision required by the Pillar 2 of Basel II. Since
2014, this has been led by the ECB and the EBA, with the aim of testing the financial
solidity of the banks and/or the banking system as a whole. Since 2016, the results
of the regulatory stress tests are taken into account in the calibration of capital
requirements under Pillar 2;
|
| ― |
the second takes the form of budget simulations and aims to stress
the central budget
of the bank on the basis of an economic scenario communicated by Crédit Agricole S.A.
in the budget process;
|
| ― |
the third involves targeted stress tests on a particular sector
or geographical zone
that constitutes a risk homogeneous group. This type of stress test is performed on
a case by case basis as part of the management of risk strategies. It provides an
insight into losses and/or capital requirements in the event that an adverse scenario
defined for the specific needs of the year should materialise; thus, the selected
strategy and notably the amount of the requested budgets may be challenged as regards
the creditworthiness of the portfolio to date, the impact of economic situations potentially
adverse to the portfolio in question may also be taken into account. Sensitivity tests
may be performed in addition to these stress tests.
|
2.4.4 Credit risk
reduction mechanism
COLLATERAL AND
GUARANTEES RECEIVED
Crédit Agricole CIB requires guarantees and collateral from a significant number
of
its counterparties to reduce its risks, either on financing or market transactions.
The principles for accepting under Basel II, taking into account and managing guarantees
and collateral are defined by the Crédit Agricole Group's Standards and Methodology
Committee.
This common framework ensures a consistent approach across the Group's various
entities.
The committee documents aspects including the conditions for prudential use, valuation
and revaluation methods and all credit risk mitigation techniques used within the
Crédit Agricole CIB Group. Crédit Agricole CIB then devises its own operational procedures
and arrangements for the detailed management of these guarantees and collateral.
Commitments given and received are presented in Note 8 to the consolidated financial
statements.
USE OF NETTING
AGREEMENTS
With the implementation of the recommendations of the Basel Committee along with
the
CRD IV European Directive on regulatory capital, the French Regulatory and Prudential
Supervisory Authority (ACPR) requires that several conditions have to be strictly
respected in order to trigger a close-out netting within the framework of determining
the regulatory shareholder's equity of a financial institution.
These conditions include: Crédit Agricole CIB obtaining recent written and reasoned
legal opinions as well as proceedings "in order to ensure at any time the validity
of the novation settlement or the netting agreement in the event that applicable regulations
are revised".
The close-out netting is defined as the possibility, in the event of default by
the
counterparty (including in the event of bankruptcy procedures), to terminate ongoing
transactions in advance and to be able to calculate a net balance of the reciprocal
obligations, according to a calculation method stipulated in the contract.
Thus, the close-out netting is an anticipated termination compensation mechanism
which
can be separated in three steps:
| ― |
early termination of transactions under a "master" agreement
in the case of a default
or changes in circumstance;
|
| ― |
determination of the market value (positive or negative) of each
transaction at the
date of termination (and the valuation, when appropriate, of the collateral);
|
| ― |
calculation and payment of the net single termination balance
including the valuation
of the terminated transactions, all collateral and outstanding amounts due (by the
party liable for the net amount).
|
Collateral (or collateralisation) represents a financial guarantee mechanism used
in OTC markets, which allows securities or cash to be transferred, as security or
as a transfer of full ownership, during the period of the hedged transactions. In
case of default by either party, the collateral will be included in the calculation
of the net balance of reciprocal obligations resulting from the master agreement that
has been signed with the counterparty.
The implementation of the close-out netting and collateralisation mechanism is
analysed
in each country according typology of contract, counterparty and product. Countries
are classified as either A or B.
Countries classified as A are those where the laws and regulation are deemed to
provide
sufficient certainty for the recognition and effective implementation of the close-out
netting and collateralisation mechanisms, including in the event of bankruptcy of
the counterparty. Conversely, countries classified as B are those where there is a
risk that these mechanisms are not recognised or for which there is no legal opinion.
The conclusions of these analyses and the proposals of classification by countries
are displayed for endorsement within the framework of the Netting and Collateral Policy
Committee (or PNC Committee).
USE OF CREDIT
DERIVATIVES
The Bank uses credit derivatives and a range of risk transfer instruments, including
securitisation, in managing its banking book (see Basel III Pillar 3 disclosures).
At 31 December 2018, outstanding protection purchased in the form of credit derivatives
amounted to €3.7 billion (€5 billion at 31 December 2017). The notional amount of
the short positions was nil (the same at 31 December 2017).
Crédit Agricole CIB trades credit derivatives with around ten top-tier investment
grade, competent and regulated banks as counterparties. Moreover, 54% of these derivatives
are processed through a clearing house (38% at 31 December 2017), which acts as an
guarantors of these credit risk hedging transactions. Bilateral transactions (i.e.
processed outside the clearing house) are conducted with investment grade counterparties
(9 counterparties as of 31 December 2018), which are competent and regulated, located
in France, the United Kingdom or the United States and acting as guarantors of these
credit risk hedging operations. The bank monitors any concentration of risks on these
hedging providers outside the clearing house, applying notional limits per banking
counterparty, set and reviewed annually by the Crédit Agricole CIB Risk Control Department.
These credit derivative transactions, carried out as part of the credit risk mitigation
measures, are subject to an adjustment calculation under Prudent Valuation, to cover
market risk concentration.
The notional amounts of credit derivative outstandings are specified in Note 3.2
to
the consolidated financial statements "Derivative instruments: total commitments"
(on page 345).
2.4.5 Exposures
MAXIMUM EXPOSURE
TO CREDIT RISK
The maximum exposure to an institution's credit risk is the net carrying amount
of
loans and receivables and debt and derivative instruments before netting and collateral
agreements. This is shown in note 3.1 of the financial statements.
At 31 December 2018, Crédit Agricole CIB's maximum exposure to credit and counterparty
risk stood at €609 billion, the same level at 31 December 2017.
CONCENTRATIONS
♦ Breakdown of
counterparty risk by geographical area (including bank counterparties)
At 31 December 2018, loans granted by Crédit Agricole CIB net of Export Credit
Guarantees
and excluding UBAF (i.e. €338 billion compared to €307 billion at 31 December 2017)
are broken down by geographic area as follows:
Breakdown in %
|
31.12.2018 |
31.12.2017 |
31.12.2016 |
| Other Western European countries |
29.8% |
29.7% |
30.1% |
| France |
21.2% |
25.6% |
21.8% |
| North America |
18.4% |
17.8% |
20.9% |
| Asia (Excl. Japan) |
11.1% |
11.7% |
12.2% |
| Japan |
10.1% |
6.0% |
4.5% |
| Middle-East and Africa |
4.9% |
4.8% |
5.3% |
| Latin America |
2.6% |
2.6% |
3.7% |
| Other European countries |
2.0% |
1.7% |
1.6% |
| Others and supranational |
0.0% |
0.0% |
0.1% |
Source: risk data (excluding UBAF, on- and off-balance-sheet commercial commitments
of customers and banks, net of export credit guarantees).
The breakdown of loans and receivables as well as commitments given to customers
and
credit institutions by geographical area is provided in Note 3.1 to the consolidated
financial statements. The overall balance of the portfolio in terms of distribution
between different geographical areas is stable overall compared to 2017. It should
be noted, however, that the increase in the share of commitments in North America
can be explained by large-scale transactions involving quality customers in the telecommunications
and energy sectors. The decline in outstanding amounts for France and the rise for
Japan is explained by our deposit activity with central banks.
♦ Breakdown of
risks by business sector (including bank counterparties)
At 31 December 2018, loans granted by the Crédit Agricole CIB Group, net of export
credit guarantees (excluding UBAF), totalled €338 billion (€356 billion gross), versus
€307 billion in 2017.
It is broken down by business sector as follows:
Breakdown in %
|
31.12.2018 |
31.12.2017 |
31.12.2016 |
| Banks |
18.77% |
16.60% |
11.60% |
| Miscellaneous |
17.82% |
17.40% |
17.40% |
| Of which securitisation |
10.21% |
10.60% |
10.60% |
| Oil & Gas |
9.11% |
9.90% |
11.40% |
| Other financial activities |
5.40% |
3.70% |
3.20% |
| Real estate |
4.99% |
5.30% |
5.80% |
| Electricity |
4.76% |
4.00% |
4.60% |
| Aeronautic/Aerospatial |
4.21% |
6.80% |
4.90% |
| Heavy industry |
3.35% |
3.40% |
4.50% |
| Automotive |
3.21% |
3.10% |
3.70% |
| Shipping |
3.10% |
3.50% |
4.60% |
| Telecom |
3.13% |
2.90% |
2.90% |
| Construction |
2.79% |
3.20% |
3.50% |
| Insurance |
2.63% |
2.20% |
2.10% |
| Other industrues |
2.50% |
2.60% |
2.70% |
| Other transport |
2.39% |
2.70% |
2.80% |
| Production & Distribution of consumer goods |
2.45% |
2.90% |
2.70% |
| IT/Technology |
2.19% |
2.10% |
2.30% |
| Healthcare and pharmaceuticals |
1.72% |
2.20% |
2.60% |
| Food-processing industry |
1.67% |
1.80% |
1.90% |
| Tourism, hotels and restaurants |
1.38% |
1.40% |
1.40% |
| Non-commercial services |
|
|
|
| Public sector/Local authorities |
1.08% |
1.20% |
1.30% |
| Media and publishing |
0.59% |
0.70% |
0.80% |
| Utilities |
0.42% |
0.50% |
0.60% |
| Wood, paper and packaging |
0.30% |
0.20% |
0.70% |
| Total |
100% |
100% |
100% |
Source: risk data (excluding UBAF, on- and off-balance-sheet commercial commitments
of customers and banks, net of export credit guarantees).
The overall balance of the portfolio, in terms of the breakdown between the different
sectors, remains globally stable from one year to the next. The changes reflect the
bank's intention, on the one hand, to reduce exposure in certain fragile sectors such
as the shipping sector and, on the other hand, to support clients in large-scale exceptional
transactions, especially in the telecommunications sector. The following specific
developments are noteworthy:
| ― |
the increase in our commitments on banks is largely related to
our deposit activity
with central banks, particularly in Japan. At 31 December 2018, our exposure to the
Bank of Japan increased significantly: it represented €27 billion versus €10.5 billion
at the end of December 2017;
|
| ― |
more than half of the exposures of the "Miscellaneous" segment
is comprised of securitisations
(mainly liquidity facilities granted to securitisation programmes financed through
our conduits) (see section 4.3 "Securitisation" of Pillar 3); these outstandings remained
stable in 2018. The other commitments involve clients with highly diversified businesses
(mainly wealth management and financial holding companies);
|
| ― |
the "Oil & Gas" sector is the main component of the "Energy"
exposure. This segment
brings together a diverse range of underlying assets, companies and financing types,
such as RBL, trade and project finance which are usually secured by assets. Most of
the exposure in the oil sector relates to players that are structurally less sensitive
to the drop in oil prices (public sector companies, large international companies,
transportation/ storage/refinery companies). Conversely, customers focused in exploration/production,
and those dependent on industry investment levels (ancillary oil services) are the
most sensitive to market conditions. After a severe crisis in the sector, our clients
are now showing stable economic performance and our portfolio is proving good post-crisis
resilience. Constrained by a risk strategy and given the price volatility, we have
a very selective approach to the "Oil & Gas" sector and any new significant transaction
is subject to an in-depth credit and CSR risk analysis when necessary;
|
| ― |
the "Electricity" sector is another component of the "Energy"
exposure but has its
own characteristics, and no contagion with the sensitive oil and gas segments. Half
of our exposure is accounted for by major integrated or diversified groups;
|
| ― |
our exposure to the "Real Estate" sector is stable due in particular
to a strong portfolio
turnover in both primary and secondary sectors and the weakening of the US dollar.
This portfolio mainly consists of specialised financings of quality assets granted
to real estate investment professionals. Other corporate-based financing is mainly
granted to major real estate companies and is often accompanied by interest rate hedges.
The balance of Crédit Agricole CIB's commitments includes guarantees issued on behalf
of leading French property developers and interest rate hedges for social housing
market participants (mainly public-sector agencies) in France;
|
| ― |
"Aeronautics" sector financings involve either asset financing
of very high-quality
assets, or the financing of major, world leading, manufacturers;
|
| ― |
the "Automotive" portfolio, which has been the focus of special
attention since the
end of 2018, is also focused mainly on large manufacturers, with limited development
in the automotive supplier sector;
|
| ― |
the current position of the "Shipping" segment is the result
of Crédit Agricole CIB's
expertise and background in mortgage financing for ships, which it provides to its
international shipowning clientele. After 9 difficult years, maritime shipping is
showing signs of moderate recovery, depending on the sub-sectors. With this in mind,
Crédit Agricole CIB is pursuing the strategy of gradually reducing our exposure since
2011. However, our portfolio is relatively well protected thanks to its diversification
(financing of oil tankers, gas carriers and off-shore facilities, cargo ships, container
ships, cruise ships, etc.), and by the quality of its financing structure for ships,
secured by mortgage loans;
|
| ― |
the "Heavy Industry" sector mainly includes large global companies
in the steel, metals
and chemicals sectors. In this sector, commitments to the Coal segment have significantly
decreased, in line with Crédit Agricole Group's CSR policy;
|
| ― |
the "Telecom" sector has commitments on operators and suppliers.
This segment includes
some LBO commitments but mainly consists of corporate lending;
|
| ― |
the "Production and distribution of consumer goods" sector includes
mainly large French
retailers with a global footprint. Their ratings remain strong despite the competitive
environment in which they operate.
|
♦ Breakdown of
outstanding loans and receivables by customer type
The concentrations of loans and receivables by type of borrower and commitments
given
to credit institutions and customers are presented in Note 3.1.3 of the consolidated
financial statements. Outstanding loans and receivables amount to €191 billion at
31 December 2018. They mainly break down between large business clients and credit
institutions (70% and 14% respectively, at 31 December 2018).
♦ Concentrations
of top ten counterparties (customers)
In terms of commitments, excluding export credit guarantees, these accounted for
6.65%
of Crédit Agricole CIB's total exposure at 31 December 2018, a decrease compared to
31 December 2017 (10.5%). This is explained by a €7,100 million guarantee issued on
behalf of the AMF, intended to cover the settlement of the Zodiac shares contributed
to Safran at the end of the takeover bid. This exposure was reduced following the
completion of Safran's initial public tender offer period for Zodiac shares, the completion
of the settlement on 13 February 2018, which reduced the guarantee issued to the AMF.
♦ Quality of portfolios
exposed to credit risk
At 31 December 2018, performing loans to customers amounted to €335 billion of
net
outstanding loans. Their ratings broke down as follows:
Breakdown in %
|
31.12.2018 |
31.12.2017 |
31.12.2016 |
| AAA (A+) |
18.9% |
16.4% |
12.2% |
| AA (A) |
5.1% |
4.7% |
4.1% |
| A (B+ et B) |
30.3% |
32.3% |
30.9% |
| BBB (C+ à C-) |
33.0% |
32.7% |
37.1% |
| BB (D+ à D-) |
9.7% |
9.7% |
10.8% |
| B (E+) |
0.7% |
0.9% |
1.0% |
| On watch (E et E-) |
0.9% |
1.5% |
1.8% |
Source: risk data (excluding UBAF, on- and off-balance-sheet commercial commitments
of customers and banks, net of export credit guarantees).
In 2018, the quality of the portfolio continued to improve, with an increase in
the
share of AAA and AA ratings. The share of investment grade ratings increased slightly
and accounts for 87% of the portfolio versus 86% in 2017, which reflects the good
quality of the portfolio.
♦ Application
of the IFRS 9 standard
The principles used to calculate expected credit loss (ECL) are described in the
accounting
policies and principles (Credit Risk section) which include, in particular, the market
inputs, assumptions and estimation techniques used.
As such, in order to calculate expected credit loss in the next 12 months and for
the remaining life, as well as to determine whether the credit risk of financial instruments
has increased significantly since the initial recognition, the Group draws mainly
on data used as part of the regulatory calculation system (internal rating system,
calculation of guarantees and loss given defaults). Two distinct types of forward-looking
macroeconomic information are used when estimating expected loss: central forward-
looking information, used to ensure the homogeneity of the macroeconomic vision for
all group entities, and local forward- looking information, which can be used to adjust
the parameters of the central scenario to take into account specific local characteristics.
For the construction of the central forward-looking, the Group relies on 4 prospective
macroeconomic scenarios drawn up by Crédit Agricole S.A.'s Economic Research Department
(ECO), which are weighted according to their expected probability of occurrence. The
baseline scenario, which is based on budget assumptions, is supplemented by three
other scenarios (adverse, moderate adverse and favourable). Quantitative models for
assessing the impact of macroeconomic data on the evolution of ECL are also used in
internal and regulatory stress tests.
The economic variables are updated quarterly and relate to the factors affecting
the
Group's main portfolios (for example: Change in French and Euro zone countries' GDP,
unemployment rate in France and Italy, household investment, oil prices, etc.).
The economic outlook is reviewed each quarter by the IFRS 9 Coordination Committee
which brings together the main Group entities as well as any departments of Crédit
Agricole S.A. that are involved in the IFRS 9 process.
The baseline scenario used in the central forward looking forecasting models of
the
Group and its subsidiaires can be summarised as follows: the strong and synchronised
recovery ends in 2018. In 2019, performances across major economic areas are contrasted
with a still very sustained growth in the United States. Performance is satisfactory
(above the potential pace) in the Euro zone but already slowing down. US growth will
slow down more sharply in 2020 as the effects of the fiscal stimulus fade and past
rate hikes gradually dampen the economy. After a little less than 3% in 2018, it should
fall below 2% in 2020. The US monetary tightening ends in 2020. In the Euro zone,
growth should slow gradually to around 1.5% in 2020. While inflationary pressure remains
very limited, the European Central Bank is maintaining a generally accommodating monetary
policy. Despite a context of multiple uncertainties, particularly political and geopolitical,
we are expecting a steady slowdown without any major disruptions.
♦ Impairement
and risk hedging policy
Accounting standard IFRS 9 came into effect on 1 January 2018, replacing IAS 39.
It
specifies the new accounting classification rules for financial assets, redefines
the model and principles of credit risk impairment of financial assets, specifies
the methods for recognising the effects of credit risk on liabilities, and finally
details the new hedge accounting methods.
INDIVIDUALLY IMPAIRED
ASSETS
The breakdown of impaired loans and receivables due from credit institutions and
customers
by type of borrower and geographic area is presented in Note 3.1 of the consolidated
financial statements. These financial statements specify impairment on doubtful and
irrecoverable loans and receivables.
ECL BUCKET 1 &
2
Impairment for credit risk under the new IFRS 9 standard differs from the collective
provisions of the old IAS 39 standard by the following three main concepts:
| ― |
a wider scope of calculation: the impairment applies to all asset
transactions recognised
at amortised cost or at fair value through equity;
|
| ― |
a different impairment philosophy: while provisioning under IAS
39 was based on recognised
losses, impairment under IFRS 9 must be estimated on the basis of losses expected
from the date of origination. The measurement of this impairment is called Expected
Credit Loss (ECL);
|
| ― |
the ECL estimate must be made with credit risk parameters that
incorporate the bank's
outlook on the evolution of the economy and its impact on the portfolio. IFRS 9 thus
introduces the concept of Forward Looking;
|
| ― |
a mechanism for allocating healthy exposures to two distinct
risk categories known
as Buckets 1 and 2: a healthy exposure whose risk deterioration from the beginning
is deemed significant will be placed in Bucket 2 resulting in impairment calculated
over a horizon equal to the contractual residual duration of the transaction. Conversely,
when the degradation is considered insignificant, the exposure is placed in Bucket
1 and impairment is calculated over a risk horizon of 1 year.
|
The amount of ECL Buckets 1 and 2 is €863 million at 31 December 2018.
♦ Country risk
policy
The general context in late 2018 and 2019 is bleak, marked by trade tensions between
the US and China, a deterioration in economic activity, a decline in trade, uncertainty
about oil prices, a higher cost of borrowing in a tense geopolitical environment.
Taking advantage of the economic upturn at the beginning of 2018, the bank's activity
in emerging markets has grown.
In 2018, the Bank reviewed its strategies and limits for 41 countries in which
it
serves its customers, as well those of its 20 business lines and sectors. It also
reviewed 21 country portfolios and 17 business lines, and updated its country and
sovereign ratings quarterly.
♦ Outlook for
2019
A less buoyant environment in the second half of 2018 was reflected in the IMF
and
World Bank's reduced growth projections: 3.5% in 2019 and 3.6% in 2020 corresponding
to 2% for developed countries and 4.2% for emerging economies. This ongoing global
slowdown is mainly related to the slowdown of the Chinese economy, which is the main
marker of the global economy and the direct cause of the decline in consumption and
investment. In this regard, the overall decline in imports from emerging countries
during 2018 is noteworthy.
Geographically, Asia and Central and Eastern Europe are expected to continue to
experience
a relatively good level of activity, while Latin America, the Middle East and Africa
will experience slower growth.
Other issues of concern: global debt (public and private) estimated at 220% of
global
GDP, up 60% over the past 10 years, and geopolitical tensions with an increased risk
of sanctions, which could lead to significant economic and social consequences fueled
by a stagnant living standards for the middle classes and worsening inequalities promoting
populism.
Nevertheless, we believe that growth should remain positive in the coming year,
at
a less certain level, but sufficient to expect an attractive business environment.
In this potentially more uncertain environment, Crédit Agricole will continue to
actively
support its local and international clients in order to assist them with expanding
their business both locally and abroad, in compliance with the regulations in force.
♦ Evolution of
exposure to Emerging economies
Commercial lending at 31 December 2018 in countries rated below "B", excluding
downgraded
countries in Western Europe (Italy, Spain, Portugal, Greece, Cyprus and Iceland) amounted
to €42 billion (including the share in the UBAF), an increase by 12% compared to the
end of 2017, due in part to the Euro/USD exchange rate and to the rise in outstanding
loans in Central and Eastern Europe and Latin America. In US dollars, the portfolio
in the scope of reference increased by 7% in comparison with the figure at the end
of 2017.
The concentration of outstandings to countries with lower than a 'B' rating, excluding
downgraded countries in Western Europe and UBAF, remained stable relative to the end
of 2017, with 98% of Crédit Agricole CIB's portfolio concentrated on 33 countries,
of which 12 accounted for 87% of the total.
In 2018, excluding downgraded countries in Western Europe, the portfolio breakdown
by country category remained stable, with the share of the portfolio with "Investment
Grade" status remaining at 70%. The portfolio for the country scope concerned remains
highly concentrated on two regions: Asia and the Middle East and North Africa, representing
68% of this portfolio.
♦ Asia
Asia is still the region with the highest exposure, with outstanding amounts of
€14.5
billion, or 35% of the commercial exposure for the corresponding country scope. This
amount has remained stable relative to the previous year, while the portfolio is still
highly concentrated on China and India.
♦ Middle-East
and North Africa
The Middle East and North Africa is the second-largest exposure of the scope under
review with 33% of outstanding amounts, or €13.8 billion, a 3% increase in comparison
to the previous year. The main exposures are concentrated in Saudi Arabia, the United
Arab Emirates and Qatar.
♦ Latin America
This region represents 15.5% of the portfolio for the corresponding country scope,
or €6.5 billion, a decrease of 17% from the previous year, mainly due to the reduction
in outstandings in Brazil. The portfolio is still focused primarily on Brazil and
Mexico.
♦ Central &
Eastern Europe
The share of Central and Eastern Europe has increased slightly when compared to
the
previous year, with an outstanding amount of €5.5 billion, or 13% of the portfolio,
mainly concentrated in Russia.
♦ Sub-Saharan
Africa
At the end of December 2018, this region represented 4% of the commercial portfolio
for the corresponding country scope, or €1.6 billion, a decrease of 11% on the previous
year. More than half of this relates to South Africa.
2.5 MARKET RISKS
Market Risks are managed within the Market and Counterparty Risks Department (MCR).
This department is responsible for identifying, measuring and monitoring market liquidity
and counterparty risks on market transactions. These are defined as the risks of potential
loss to which Crédit Agricole CIB is exposed through market positions it holds, depending
on the fluctuation of the different market parameters, as well as the independent
valuation of the results.
For example, relevant market risks for Crédit Agricole CIB include the following,
which are potential losses related to:
| ― |
Interest rates variation
These risks are considered in detail: maturity, underlying interest
rate indices,
currencies;
|
| ― |
Equity prices variation
Crédit Agricole CIB's equity risk is focused on big European corporates
(financing,
equity investment guarantee, the running of company savings schemes, convertible issues,
loans and borrowing) and EMTN on equity indices;
|
| ― |
Deterioration in credit quality
Through its market-making activity for the main OECD sovereign
debt issues and its
customers' bond issues; Crédit Agricole CIB is exposed to changes in the risk premium
on securities in which it deals;
|
| ― |
Changes in exchange rates
Crédit Agricole CIB's activity on behalf of our investor and corporate clients
exposes
us to currency market fluctuations.
On the other hand, its presence in many countries leads to structural
foreign exchange
positions, managed within the framework of the Asset-Liability Committees;
|
| ― |
Price volatility
The market value of some derivative products changes depending
on the volatility of
the underlying, rather than in relation to the market's volatility. These risks are
subject to specific limits.
|
2.5.1 Market risk
control system
SCOPE OF INTERVENTION
The scope of management's intervention mainly concerns all the trading portfolios
of the entities consolidated in Crédit Agricole CIB's accounts - subsidiaries or branches
- in France and abroad; the main business lines are: Credit and Rates, Volatility
and Foreign Exchange, Equities.
MCR is also in charge of monitoring market risk within the Credit Portfolio Management
(CPM) Department, whose dual mission is to manage Crédit Agricole CIB's macro counterparty
risk and minimise the banking book's cost of capital.
MCR ORGANISATION
AND MISSIONS
The organisation of the MCR Department complies with regulatory standards and developments
in market activity.
The basic principles guiding the MCR's organisation and operations are:
| ― |
the independence of the Risk function in relation to the operational
departments (Front
Offices) and the other functional departments (Back Offices, Middle Offices, Finance);
|
| ― |
an organisation that simultaneously ensures appropriate and specialised
treatment
for each type of market activity and the consistent application of methodologies and
practices, regardless of where the activity is being performed or its accounting location.
|
These different missions are distributed as follows:
| ― |
activity monitoring, which is responsible for:
| ― |
the daily validation of management results and market and liquidity
risk indicators
for all activities governed by market risk limits,
|
| ― |
controlling and validating market parameters in an independent
environment from the
Front Office.
Lastly, through joint responsibility with the Finance Department,
it participates
in the monthly reconciliation between the management result and reported result;
|
|
| ― |
risk management monitors and controls market risks for all product
lines, specifically:
| ― |
establishing sets of limits, monitoring breaches and reestablishing
compliance with
the limits, and monitoring significant changes in results, which are notified to the
Market Risk Committee,
|
| ― |
analysing risks carried by product line,
|
| ― |
second-level validation of risks and monthly reserves;
|
|
| ― |
cross-functional teams round out this system by ensuring the harmonisation
of methods
and treatment among product lines. They combine the following functions:
| ― |
the team responsible for validating pricing models,
|
| ― |
the team in charge of the internal model (VaR, stressed VaR,
stress scenarios, IRC,
etc.),
|
| ― |
the Market Data Management team, which performs controls on independent
market data,
|
| ― |
the International Consolidation team, whose main mission is to
produce the consolidated
information for the department;
|
|
| ― |
the COO (Chief Operational Officer) and his team coordinate Group-wide
issues: projects,
new activities, budgets, reports and committees.
|
DECISION AND MONITORING
COMMITTEE OF MARKET RISK
The entire mechanism is placed under the authority of a set of committees:
| ― |
the Group Risk Committee (Crédit Agricole S.A.) sets overall
limits in regard to the
Group's risk appetite;
|
| ― |
the Strategies & Portfolios Committee (Crédit Agricole CIB)
validates the strategic
guidelines and the acceptable risk constraints, in line with the Group and Bank's
risk policy. This Committee, chaired by Crédit Agricole CIB's General Management,
includes, among others, a member representing Crédit Agricole S.A.'s Risk Management
Department, Risk Managers for Market Activities and Front-Office representatives of
Market Activities;
|
| ― |
the Market Risk Committee (Crédit Agricole CIB) grants limits
to the operating divisions
within the framework of the allocations set by the Strategies & Portfolios Committee
and ensures compliance with the monitoring indicators, specific management rules and
defined limits. This Committee, chaired by Crédit Agricole CIB's General Management,
is composed of a member representing Crédit Agricole S.A.'s Risk Management Department,
the Risk Managers of Market Activities and the Front-Office representatives of Market
Activities;
|
| ― |
the Liquidity Risk Committee (Crédit Agricole CIB) monitors and
analyses liquidity
risks and their evolution. It ensures compliance with monitoring indicators, specific
management rules and defined limits and the proper application of Group standards.
It also serves as the Liquidity Emergency Plan Committee in the event of a crisis.
Chaired by the General Management, the CRL includes the Head of Group Financial Risks,
the head of the Group Treasury, the heads of GMD, the Treasury and Foreign Exchange,
the heads of the Finance Department and ALM and the Market Risk heads.
|
SIGNIFICANT EVENTS
IN 2018 WHICH HAD AN IMPACT ON THE MARKET RISK SCOPE
Crédit Agricole CIB continued its work on rolling out a Market Risk ecosystem to
meet
the requirements of the Fundamental Review of the Trading Book that is also compatible
with BCBS 239.
Following the latest recommendations of the Basel Committee, the ECB sent a provisional
timetable for the implementation of the Fundamental Review of the Trading Book for
European banks with entry into force in 2023 at the earliest.
In this context, the implementation of the market risk system in the new MASAI
FRTB
ecosystem, according to the BCBS239 principles, has been prioritised over the 2018-2020
period. It includes the following elements: implementation of data management principles,
centralisation of valuation methods, production of market risk metrics and systems
for the analysis and control of those metrics.
Following the ECB 2017 Targeted Review of Internal Models (TRIM) regarding the
review
of internal models, Crédit Agricole CIB is authorised to continue the use of its VaR
models, the stressed value-at-risk models (SVaR) as well as the models for additional
risk of default and migration (IRC) for the calculation of capital requirements for
market risks.
This authorisation carries with it obligations that must be met in 2019 and 2020,
which will be the subject of a quarterly progress report with the ECB.
2.5.2 Market risk
measurement and management methodology
VALUE AT RISK
(VaR)
VaR is calculated daily on all positions. It represents the potential future loss
with a 99% confidence interval. Since VaR does not recognise extreme market conditions,
it should not be confused with the concept of maximum loss. Stressed VaR and stress
scenarios are used in addition to this system in order to measure these extreme risks.
CHANGE IN REGULATORY
VaR IN 2018
Graph n° 1 (see page 193) shows the change in Crédit Agricole CIB's VaR for the
regulatory
scope in 2017-2018.
In 2018, the regulatory VaR averaged €5.6 million (significantly lower than the
average
€8 million reported in 2017) and ranged between a lower limit of €3.5 million and
an upper limit of €8.5 million.
During 2018, Crédit Agricole CIB's Regulatory VaR remained moderate, which showed
a control of the risk profile despite a return of some volatility and an acceleration
at the end of the period. Graph n°2 (see page 193) shows the evolution of the quarterly
averages of the regulatory VaR and other VaRs for each of Crédit Agricole CIB's business
lines since 1 January 2017.
All Crédit Agricole CIB activities are based on internal model, except a very few
products still based on standard methodology.
► Change in regulatory
VaR
|
|
31.12.2018 |
| € million |
Minimum |
Average |
Maximum |
End of year |
| Total VaR |
4 |
6 |
8 |
5 |
| Netting |
(4) |
(5) |
(8) |
(6) |
| Rates VaR |
2 |
3 |
4 |
3 |
| Equity VaR |
1 |
2 |
3 |
2 |
| Fx VaR |
1 |
2 |
5 |
3 |
| Credit VaR |
2 |
3 |
5 |
2 |
|
|
29.12.2017 |
| € million |
Minimum |
Average |
Maximum |
End of year |
| Total VaR |
5 |
8 |
14 |
5 |
| Netting |
(0.4) |
(5) |
(9) |
(6) |
| Rates VaR |
3 |
4 |
6 |
3 |
| Equity VaR |
1 |
2 |
3 |
2 |
| Fx VaR |
2 |
3 |
6 |
2 |
| Credit VaR |
3 |
5 |
7 |
5 |
► Graph 1: Crédit
Agricole CIB regulatory VaR over the period 2017-2018 (in million
of euros)
► Graph 2: Evolution
of quarterly averages of the regulatory VaR and the VaR by product
line over the period 2017-2018 (in million of euros)
► Graph 3: Backtesting
of Crédit Agricole CIB regulatory VaR for the year 2018 (in
million of euros)
♦ VaR Backtesting
(graph N° 3)
The VaR backtesting method for the Crédit Agricole CIB regulatory scope compares
daily
VaR amounts with the so-called clean or actual daily P&L (excluding reserves)
on the
one hand and with the theoretical P&L (restated for reserves and new trades) on
the
other.
At the end of December 2018, over a rolling one-year period, there were four backtesting
exceptions with a theoretical loss greater than the VaR (excluding daily trades).
CAPITAL REQUIREMENTS
RELATED TO THE STRESSED VaR
At 31 December 2018, the capital requirements related to the VaR amounts to €64
million.
| € million |
31.12.18 |
Minimum |
Maximum |
Average |
29.12.17 |
| VaR |
64 |
61 |
85 |
72 |
84 |
STRESSED REGULATORY
VaR STATISTICS
If the historical data used to calculate VaR shocks originate in low volatility
market
situations, the resulting VaR will have a low level. To compensate for this pro-cyclical
bias, the regulator introduced the stressed VaR.
Stressed VaR is calculated using the "initial" VaR model for a confidence interval
of 99% and a one day horizon, and over a period of stress that corresponds to the
most severe period for the most significant risk factors. At the end of 2018, the
Stressed VaR period covers the period December 2007 to December 2008.
CHANGE IN STRESSED
REGULATORY VaR IN 2018
Graph No 4 (overleaf) shows the changes in Crédit Agricole CIB's stressed regulatory
VaR over the 2017-2018 period.
The VaR Stressed 2018 average is €16 million, close to that of 2017 but with a
wider
range of variation, as shown in the table of statistics below, which show the continuation
of a prudent management policy of Crédit Agricole CIB.
The following table compares the data for stressed regulatory VaR with that of
regulatory
VaR.
|
|
31.12.2018 |
| € million |
Minimum |
Average |
Maximum |
End of year |
| Stressed regulatory VaR |
11 |
16 |
25 |
19 |
| Regulatory VaR |
4 |
6
|
8
|
5 |
|
|
29.12.2017 |
| € million |
Minimum |
Average |
Maximum |
End of year |
| Stressed regulatory VaR |
11 |
15 |
22 |
14 |
| Regulatory VaR |
5 |
8 |
14 |
5 |
CAPITAL REQUIREMENTS
RELATED TO THE STRESSED VaR
At 31 December 2018, the capital requirements related to the stressed VaR amounts
to €250 million.
| € million |
31.12.18 |
Minimum |
Maximum |
Average |
29.12.17 |
| Stressed VaR |
250 |
166 |
250 |
202 |
202 |
► Graph 4: Stressed
regulatory VaR, 99% confidence interval, 1 day (in million of
euros)
STRESS TESTS
Stress tests were developed to assess the ability of financial institutions to
withstand
a shock to their activities. This shock may be economic (economic downturn for example)
or geopolitical (conflict between countries).
To satisfy regulatory requirements and complete its VaR measurements, Crédit Agricole
CIB thus applies stress scenarios to its market activities in order to determine the
impact of particularly strong (and unpredictable or difficult to categorise) disruptions
on the value of its accounts. These scenarios are developed using three complementary
approaches:
1. Historical approaches, which replicate the impact of major past crises on the
current
portfolio. The following historical scenarios were used:
| ― |
1994 crisis: bond crisis scenario;
|
| ― |
1998 crisis: credit market crisis scenario, which assumes an
equity market downturn,
sharp interest rate hikes and declines in emerging country currencies;
|
| ― |
1987 crisis: stock market crash scenario;
|
| ― |
October 2008 crisis and November 2008 crisis (these latter two
scenarios reproduce
the market conditions following the insolvency of the investment bank Lehman Brothers).
|
2. Hypothetical scenarios, which anticipate plausible shocks and are developed
in
collaboration with economists. The hypothetical scenarios are:
| ― |
economic recovery (rising equity and commodity markets, strong
increase in short term
interest rates and appreciation of the US Dollar, and tightening of credit spreads);
|
| ― |
tightening of liquidity (sharp increase in short-term rates,
widening of credit spreads,
equity market decline);
|
| ― |
a scenario representing economic conditions in a situation of
international tensions
between China and the United States (increased volatility and falling equity markets,
decline in future prices and rising volatility in the commodities market, flattening
yield curves, slide in the US Dollar relative to other currencies, and widening of
credit spreads).
|
3. Two so-called contrasting approaches (one ten-year and one extreme) which consist
in adapting assumptions to simulate the most severe situations depending on the structure
of the portfolio when the scenario is calculated:
| ― |
a so called "adverse ten-year" approach, assessing the impact
of large scale and adverse
market movements for each activity individually. The calibration of the shocks is
such that the scenario has a probability of occurrence about once every ten years
and the initial period before the Bank reacts to the events is around ten days. The
measured losses under this scenario are controlled through a limit;
|
| ― |
a so-called "extreme adverse" approach that measures the impact
of market shocks of
greater intensity and for a period greater than the adverse ten year stress in order
to simulate rare but nevertheless possible events. Shocks simulated under extreme
adverse stress are about twice as hard as those in the adverse ten-year stress. Their
impact on the stress result can be significantly more severe for non-linear products
with an option component.
|
These indicators are also subject to a limit set in agreement with Crédit Agricole
S.A..
Overall stresses are calculated on a weekly basis and presented to the Crédit Agricole
CIB Market Risk Committee twice a month. Meanwhile, specific stress scenarios are
developed for each business line. They are produced weekly. These scenarios make it
possible to analyse the specific risks of the various business lines more effectively.
Regularly stress is put in place in anticipation of ad-hoc market events: Brexit,
French elections.
Graph 5 below shows the comparison of the evolution of stress scenarios in 2017
and
2018.
► Graph 5: 2017
and 2018 average values of stress scenarios (in million of euros)
Between 2017 and 2018, adverse ten-year and extreme adverse stresses increased.
On
average, they rose from €92 million and €268 million in 2017 to €120 million and €323
million in 2018, respectively. The increase in extreme stress at the end of the year
is mainly related to interest rate and foreign exchange activities. The stress levels
(excluding CVA) observed in 2018 are generally far below the limits.
2.5.3 Other Indicators
The VaR measurement is combined with a complementary or explanatory set of indicators,
most of which include limits:
| ― |
the sets of limits enable specific control of risks. Reproduced
for each activity
and mandate, they specify the authorised products, maximum maturities, maximum positions
and maximum sensitivities; they also include a system of loss alerts;
|
| ― |
other analytical indicators are used by Risk Management. They
include in particular
notional indicators in order to reveal unusual transactions;
|
| ― |
in accordance with CRD III (entry into force on 31 December 2011),
Crédit Agricole
CIB has established specific default risk measurements on credit portfolios.
|
CAPITAL REQUIREMENTS
RELATED TO THE IRC
The Incremental Risk Charge (IRC) is an additional capital requirement on so called
linear credit positions (i.e. excluding credit correlation positions), required by
the regulator in CRD III following the subprime crisis.
The purpose of the IRC is to quantify unexpected losses caused by credit events
affecting
issuers, i.e. defaults or rating migrations (both upgrades and downgrades). In other
words, the IRC recognises two risk measures:
1. Default risk (potential gains and losses due to the default of the issuer);
2. Migration risk, which represents potential gains and losses following a migration
of the issuer's credit rating and the impact of related spreads.
The IRC is calculated with a confidence interval of 99.9% over a one year risk
horizon
using Monte Carlo simulations.
The simulated default and credit migration scenarios are then valued using Crédit
Agricole CIB pricing models. These values show a distribution, from which a 99.9%
quantile calculation makes it possible to obtain the IRC.
At the end of December 2018, the capital requirements related to the IRC totalled
€200 million.
| € million |
31.12.2018 |
Minimum |
Maximum |
Average |
29.12.2017 |
| IRC |
200 |
173 |
331 |
230 |
172 |
STANDARD CRD 3
METHOD REQUIREMENTS
Standard CRD 3 is an additional capital requirement for issuer risk not covered
by
the IRC and the CRM (Comprehensive Risk Measure). The final measure required by the
supervisory authorities is the standard method for securitisation positions in the
trading book.
The capital requirement in connection with the standard method was €5 million at
31
December 2018.
| € million |
31.12.2018 |
Minimum |
Maximum |
Average |
29.12.2017 |
| Standard CRD 3 method |
5 |
5 |
9 |
7 |
8 |
CAPITAL REQUIREMENTS
RELATED TO PRUDENT VALUATION
In the framework of CRD IV, the Basel III Committee requires the implementation
of
a prudential measure (Prudent Valuation) at the carrying amount based on the market
price for all positions in Trading Book and Banking Book recognised at fair value
with a 90% confidence interval.
Prudent Valuation is broken down into nine additional valuation adjustments: market
price uncertainty, close-out costs, model risk, concentrated positions, unearned credit
spreads, investing and funding costs, early termination, future administrative costs
and operational risks. All of these various categories are then aggregated and deducted
from Common Equity Tier 1.
The calculation of valuation adjustments based on regulatory requirements had an
impact
of €840 million for Crédit Agricole CIB (including €394 million for market risks)
on capital at the end of December 2018.
2.6 ASSET AND
LIABILITY MANAGEMENT - STRUCTURAL FINANCIAL
Financial Management policies of Crédit Agricole CIB are defined by the Asset and
Liability Management Committee in close coordination with Crédit Agricole S.A., which
approves the main lines in the area of financial risks through the Group Risks Committee
(CRG).
This committee is chaired by the Deputy Chief Executive Officer in charge of Finance.
The committee includes the members of the Executive Committee, the heads of Finance,
of Treasury, a representative of the Crédit Agricole S.A. Finance Division and representatives
of the Crédit Agricole S.A. and Crédit Agricole CIB Market Risk Management.
It is lead by Crédit Agricole CIB's Head of Financial and Strategic Financial and
Strategic Steering. It meets quarterly and it is the decision-making body for the
Group Asset and Liability Management policy. It intervenes either in direct management
or in supervision and in general coordination for the areas of Asset and Liability
Management that are formally delegated to foreign branches and subsidiaries.
The Finance Department (via the Financial and Strategic Steering Department) is
responsible
for implementing the decisions of the Asset-Liability Management Committee.
Financial Risk Management includes the monitoring and the supervision of interest-rate
risks (excluding trading activities), structural and operational foreign exchange
risks and liquidity risks of Crédit Agricole CIB in France and abroad. It particularly
includes direct management of equity and long-term financing positions. The cost of
Financial Risk Management is reinvoiced to the business lines according to their contribution
to risks.
2.6.1 Global interest
rate risks
Global interest rate risk or interest rate risk on the banking book of a financial
institution is the risk incurred when a change in interest rates occurs, as a result
of all balance sheet and off-balance sheet transactions, except transactions subject
to market risk.
OBJECTIVES AND
POLICY
Global interest-rate risk management aims to protect commercial margins against
rate
variations and to ensure a better stability over time of the equity and long-term
financing components' intrinsic value.
The intrinsic value and the interest margin are linked to the sensitivity in the
interest
rate variation of the net present value and in cash flow variation of the financial
instruments in the on and off balance sheet. This sensitivity arises when assets and
liabilities have different maturities and dates for interest-rate refixing.
RISK MANAGEMENT
Each operating entity manages its exposure under the control of its own Asset and
Liability Management Committee in charge of ensuring compliance with the Group limits
and standards.
The Headquarters' Financial and Strategic Steering Department - as part of its
coordination
and oversight mission - and the Counterparty and Market Risks that participate in
the Local Committees ensure the consistency of methods and practices within the Group
as well as the monitoring of the limits allocated to each of its entities. The Group's
overall interest rate risk exposure is presented to Crédit Agricole CIB's Assets and
Liabilities Management Committee. This committee:
| ― |
examines consolidated positions which are determined at the end
of each quarter;
|
| ― |
ensures that Crédit Agricole CIB complies with its limits;
|
| ― |
decide on management measures based on propositions made by the
Financial and Strategic
Steering Department.
|
METHOD
Crédit Agricole CIB uses the gap method (fixed rate) to measure its global interest
rate risk.
This consists of determining maturity schedules and interest rates for all assets,
liabilities and hedging derivatives at fixed or adjustable interest rates:
| ― |
until the adjustment date for adjustable rate items;
|
| ― |
until the contractual date for fixed rate items;
|
| ― |
and using model based conventions for items without a contractual
maturity.
|
The gap measurement includes the rate hedging effect on fair value and cash flow
hedges.
EXPOSURES
Crédit Agricole CIB's exposure to overall interest rate risk on customer transactions
is limited given the rate matching rule for each customer financing with the Treasury.
The interest rate risk mainly comes from capital, investments, modelling of unpaid
liabilities, and from maturities under one year of the banking book's Treasury activities.
The Group is mainly exposed to the Euro zone and, to a lesser extent US Dollar,
interest
rate variation.
Crédit Agricole CIB manages its exposure to interest rate risk within the framework
of exposure limits in terms of gaps and net present value (NPV) for all currencies
defined by Crédit Agricole S.A..
Interest rate gaps measure the surplus or deficit of fixed rate resources. Conventionally,
a positive gap represents an exposure to a risk of falling interest rates during the
period.
The results of these measurements at 31 December 2018 reflect that Crédit Agricole
CIB is exposed to a fall in interest rates.
| € billion |
0-1 year |
1-5 years |
5-10 years |
| Average gap US dollar |
+ 0.62 |
(0.39) |
+ 0.13 |
| Average gap Euro |
+ 0.34 |
+ 0.38 |
+ 0.17 |
In terms of net banking income sensitivity for the first year, Crédit Agricole
CIB
could lose €42 million of revenues in case of a long-term 200-basis-point decrease
in interest rates, i.e. a 0.76% sensitivity for a reference net banking income of
€5,560 million in 2018.
Based on these same sensitivity calculations, the net present value of the loss
incurred
in the next ten years in the event of an adverse 200 basis point movement in the yield
curve equals 0.47%, i.e. €105 million of the Group's prudential capital.
In addition, the income impacts of eight stress scenarios (five historical and
three
hypothetical) regarding the interest rate gap are measured on a quarterly basis and
reported to the Asset and Liability Management Committee.
The scenarios are those used by Crédit Agricole CIB's Treasury Department:
| ― |
the historical scenarios include: a major equity market crash
(Black Monday in 1987);
a surge in interest rates (bond crash in 1994); a sharp increase in issuer spreads
(rise in credit spreads in 1998); the 2008 financial crisis linked to the US mortgage
market (two scenarios);
|
| ― |
the hypothetical scenarios are based on: the assumption of an
economic recovery (rise
of the equity market, rates in general, the USD spot rate and oil and a decrease in
issuer spreads); a liquidity crisis following the Central Bank's decision to increase
its key rates; frictions in international relations as a result of stalled business
relationships between China and the United States (increase in US rates, collapse
of the US equity market, widening of credit spreads and depreciation of the US Dollar
compared to other currencies, especially the euro).
|
Simulations are made using the sensitivity of Crédit Agricole CIB's interest-rate
mismatch. Sensitivity is defined as the gain or loss arising from a 2% change in interest
rates. This sensitivity is calculated in EUR and USD. The calculation is based on
average outstandings.
The shocks contained in these scenarios are calculated on a 10-day basis, according
to Crédit Agricole CIB's stress scenario methodology. Sensitivity is "shocked" in
various ways. The result of a stress test corresponds to the net present value of
changes in the scenario's characteristics.
The application of stress scenarios highlights relatively limited impacts since
the
net present value of the maximum potential loss incurred represents €41 million that
is 0.18% of shareholders' equity, and 0.74% of revenues at 31 December 2018.
INTERNAL CAPITAL
REQUIREMENT ASSESSMENT
A measurement of the Pillar 2 capital requirement assessment is carried out to
assess
currency risks taking into account:
| ― |
a change in the economic value resulting from the application
of a set of internal
scenarios;
|
| ― |
one-year net interest margin driven by interest rate shocks.
|
2.6.2 Foreign
Exchange Risks
The foreign exchange risk is the financial risk associated with an unfavourable
change
in exchange rates on the foreign exchange market. It is primarily assessed by measuring
net residual exposure, taking into account gross foreign exchange positions and hedging
and differentially between structural and operational foreign exchange risk.
STRUCTURAL EXCHANGE-RATE
RISK
The Group's structural foreign exchange risk results from its other than temporary
investments in assets denominated in foreign currencies, mainly the equity of its
foreign operating entities, whether they result from acquisitions, transfers of funds
from head office or the capitalisation of local earnings.
In most cases, the Group's policy is to borrow the currency in which the investment
is made in order to immunise that investment from currency risk. These borrowings
are documented as investment hedging instruments. In certain cases, and particularly
for less liquid currencies, the investment leads to the purchase of the currency concerned;
the currency risk is then hedged with forward operations if possible.
Overall, the Group's main gross structural foreign exchange positions are denominated
in US dollars, in US dollar linked currencies (mainly Middle Eastern and some Asian
currencies), in sterling and in Swiss franc.
The Group's policy for managing structural foreign exchange positions aims at achieving
two main goals:
| ― |
regulatory (by way of exception) to protect the Group's solvency
ratio against currency
fluctuations; for this purpose, unhedged structural currency positions will be scaled
so as to equal the proportion of risk weighted assets denominated in the currencies
concerned and unhedged by other types of equity in the same currency;
|
| ― |
in relation to assets, to reduce the risk of loss of value for
the assets under consideration.
|
Structural foreign exchange risk hedging is centrally managed and implemented on
the
recommendations of the Structural Exchange Rate Committee and decisions of the Bank's
Asset and Liability Management Committee.
Crédit Agricole CIB's structural currency positions are also included with those
of
Crédit Agricole S.A., which are presented four times a year to its Assets and Liabilities
Committee, chaired by Crédit Agricole S.A.'s Chief Executive Officer. They are also
presented once a year to the Group Risk Committee.
OPERATIONAL FOREIGN
EXCHANGE RISK
The Bank is further exposed to operational exchange rate positions on its foreign
currency income and expenses, both at head office and in its foreign operations.
The Group's general policy is to limit net operational exchange rate positions
as
far as possible by periodically hedging them, usually without prior hedging of earnings
not yet generated except if they have a high probability and a high risk of impairment.
The management of operational foreign exchange positions depends, according to
their
level of importance, on the annual Crédit Agricole Group Risk Committee or the Crédit
Agricole CIB Asset and Liability Management Committees.
The different foreign currencies' contributions to the balance sheet are detailed
in Note 3.2 "Foreign exchange risk".
2.6.3 Liquidity
and financing risk
The Crédit Agricole CIB Group is, like all credit institutions, exposed to the
risk
of not having sufficient funds to honour its commitments. This risk could for example
be realised in the event of a mass withdrawal of customer or investor deposits or
during a confidence crisis or even a general liquidity crisis in the market (access
to interbank, monetary and bond markets).
OBJECTIVES AND
POLICY
Crédit Agricole CIB's first goal in terms of managing its liquidity is to always
be
able to cope with any prolonged, high-intensity liquidity crises.
The Crédit Agricole CIB Group is part of the Crédit Agricole Group's scope when
it
comes to liquidity risk management and uses a system for managing, measuring and containing
its liquidity risk that involves maintaining liquidity reserves, organising its funding
activities (limitations on short-term funding, staggered scheduling of long-term funding,
diversifying sources of funding) and balanced growth in the assets and liabilities
sides of its balance sheet. A set of limits, indicators and procedures aims to ensure
that this system works correctly.
This internal approach incorporates compliance with all local regulations on liquidity.
RISK MANAGEMENT
At Crédit Agricole CIB, responsibility for liquidity risk management is shared
by
several departments:
| ― |
the Financial and Strategic Steering Department manages liquidity
risks (framing liquidity
needs, anticipating regulatory changes, formalising financing plan, etc.);
|
| ― |
the Execution Management department carries out market transactions
in accordance
with the instructions of the Financial and Strategic Steering Department and the Financing
Plan validated by the Scarce Resources Committee;
|
| ― |
the Risk Department is in charge of validating the system and
monitoring compliance
with the rules and limits.
|
♦ Governance
Crédit Agricole CIB Group's Rare Resources Committee defines and follows the asset-liability
management policy. Together with the Management Committee, it makes up the executive
governance body and sets all the operational limits for Crédit Agricole CIB. It is
a decision-making body for tracking the raising of MLT funds and monitoring short
and long-term limits.
The Liquidity Risk Committee ensures the implementation of Group standards for
monitoring
liquidity risk at the operational level; It validates the methodologies used, establishes
limits on the liquidity risk indicators specific to Crédit Agricole CIB, monitors
the limits and thresholds for alerts and, if applicable, approves proposals for managing
overruns. It also serves as the Liquidity Emergency Plan Committee in the event of
a crisis.
♦ Operational
Steering
The Financial and Strategic Steering Department manages rare liquidity resources
within
a framework constrained by the regulations, the group's standards and the defined
budget trajectory. Liquidity risk management is part of the level of risk appetite
validated by the Crédit Agricole CIB Board of Directors. This department is responsible
for Steering and monitoring liquidity risk, anticipating regulatory changes and, where
applicable, related hedging requirements, planning issuance programs and invoicing
liquidity to the consuming business lines.
The Execution Management department is responsible for the operational management
of liquidity refinancing.
The treasury ensures the day-to-day management of Crédit Agricole CIB Group's short-term
refinancing, the coordination of issuance spreads and the management of the Treasury's
liquid assets portfolio. Within each cost centre, the local Treasurer is responsible
for managing funding activities within the allocated limits. He reports to the Crédit
Agricole CIB Treasurer and the local Assets and Liabilities Committee. He is also
responsible for ensuring compliance with all local regulations applicable to shortterm
liquidity.
The operational management of medium and long-term refinancing is delegated to
ALM
Execution, in charge of monitoring the long-term liquidity raised by the Bank's market
desks, the monitoring of issuance programs and the control of consistency in issuance
prices.
2018 REFINANCING
CONDITIONS
In addition to traditional sources of short-term liquidity, Crédit Agricole CIB
actively
diversifies its sources of financing by implementing a policy whereby it maintains
diversified access to these markets via multi-format issue programmes (Commercial
Paper/ Certificate of Deposit) and intended for various geographical areas (New York,
London, Tokyo, Australia, Hong Kong, etc.). Crédit Agricole CIB's long-term liquidity
resources are primarily sourced from interbank loans and various debt security issues.
Crédit Agricole CIB uses its Euro Medium Term Notes (EMTN) programs. At 31 December
2018, amounts issued under EMTN programs represent approximately €27.5 billion.
The issues made as part of these programmes in order to meet the needs of Crédit
Agricole
CIB's international and domestic customers are "structured" issues, i.e. the coupon
that is paid and/or the amount that is reimbursed upon maturity includes a component
that is linked to one or more market indices (equity, interest rate, exchange rate
or commodity). Likewise, some issues are known as credit linked notes i.e. the reimbursement
is reduced in the event of default of a third party defined contractually at the time
of the issue. Crédit Agricole CIB also still holds two Covered Bonds issued by Crédit
Agricole S.A. and backed by Crédit Agricole CIB's export credit loans.
♦ Maintenance
of a well-balanced balance sheet in 2018
In 2018, Crédit Agricole CIB continued to strengthen its balance sheet structure
by
increasing the volume of stable funding through customers deposits.
PROCESS
Crédit Agricole CIB's liquidity management and control system is structured around
several risk indicators, the definition and control of which are the subject of standards
approved by the governance bodies of Crédit Agricole CIB and Crédit Agricole Group:
| ― |
short-term indicators comprising mainly stress scenario simulations
(all currencies
and the dollar) the aim of which is to regulate the liquidity risk based on the tolerance
levels defined by the Group; short-term debt facilitating regulation of the maximum
amount of short-term net market financing; the measurement of static and dynamic gaps
and the monitoring of diversification indicators;
|
| ― |
medium to long-term indicators serving as a means to move towards
one year for all
currencies as well as the major currencies; concentration of the maturities of MLT
refinancing sources for the main currencies, the aim of which is to allow for a renewal
at maturity without excessive demand on the market;
|
| ― |
balance sheet indicators, including the stable funding position,
defined as the long-term
sources surplus over long-term assets, which aim to protect business lines from reliance
on refinancing on the money market.
|
The system also incorporates regulatory indicators:
| ― |
the purpose of the Liquidity Coverage Ratio (LCR) is to ensure
that the banks have
access to a reserve of High-Quality Liquid Assets to cover the cash outflows in the
event of a 30 day liquidity crisis. The Bank establishes its measurement on a consolidated
basis. A minimum of 100% compliance with this ration is required as from 1 January
2018. Crédit Agricole CIB already manages its LCR beyond 100%. It stands at an average
of 117% in 2018;
|
| ― |
additional liquidity analysis reports called Additional Liquidity
Monitoring Metric
(ALMM) attached to the LCR,
|
| ― |
the Net Stable Funding Ratio (NSFR), whose calculation procedures
are described in
a publication by the Basel Committee dated October 2014, compares the stock of liabilities
with an effective or potential maturity of at least one year to assets with similar
effective or potential maturity. Each year, the defining of the NSFR includes assigning
a weighting to each item in the balance sheet reflecting its potential to have a maturity
of more than one year. To date, some weightings are still under discussion and European
regulations have not yet fully defined this ratio, which will be the subject of a
subsequent regulatory framework.
|
The liquidity risk associated with securitisation activities is monitored by the
business
lines in charge, but also centrally by the Market Risk and Asset and Liability Management
(ALM) Departments. The impact of these activities is incorporated into the Internal
Liquidity Model indicators mainly the stress scenarios, liquidity ratios and liquidity
gaps. The management of liquidity risk at Crédit Agricole CIB is described in more
detail in the paragraph "Liquidity and financing risk" of the Risk Factors part of
this section.
2.6.4 Interest
rate risk and foreign exchange risk hedges
Within the framework of managing its financial risks, Crédit Agricole CIB uses
instruments
(interest rate swaps and forex transactions) for which a hedging relation is established
based on the management intention that is followed.
The Note 3.4 to the Group consolidated financial statements presents the market
values
and notional amounts of derivative financial instruments held for hedging.
FAIR VALUE HEDGES
The aim is to protect the intrinsic value of fixed-rate financial assets and liabilities
that are sensitive to changes in interest rates, by hedging them with instruments
that are also at fixed rate. When hedging takes place through derivatives (swaps),
the derivatives are termed fair value hedge derivatives.
The hedges performed by the Finance Department in charge of Asset and Liability
Management
relate to the outstanding amounts of unpaid client deposits in Wealth Management,
which are treated as fixed rate financial liabilities.
CASH FLOW HEDGES
The second aim is to protect interest margin so that interest flows generated by
variable
rate assets financed by fixed rate liabilities (working capital in particular) are
not affected by the future fixing of interest rates on these items.
When the required neutralisation takes place through derivatives (swaps), these
derivatives
are termed cash flow hedge derivatives. According to IFRS 7, future interests related
to balance sheet items under cash flow hedge strategy are detailed below, by maturity.
| € million |
>1 year to ≤ 5 years |
>5 years |
Total |
| Hedged cash flows to receive |
133 |
205 |
338 |
| Hedged cash flows to pay |
|
|
|
♦ IFRS Documentation
of hedges under IFRS
The hedging relationships of macro-hedges managed by the Finance Department in
charge
of Asset and Liability Management are documented from the outset and verified quarterly
by carrying out prospective and retrospective tests.
For this purpose, hedged items are classified by maturity, using the characteristics
of contracts or, for items without contractual maturities (such as demand deposits),
runoff models based on each product's behaviour. The comparison between this maturity
schedule and that of the derivative instrument allows the efficiency of the hedging
to be assessed.
FOREIGN EXCHANGE
NET INVESTMENT HEDGING
The instruments used to manage structural foreign exchange risk are classified
as
hedges of net investments in foreign currencies. The effectiveness of these hedges
is quarterly documented.
2.6 OPERATIONAL
RISKS
Operational risk is the risk of loss resulting from shortcomings in internal procedures
or information systems, human error or external events that are not linked to a credit,
market or liquidity risk.
2.6.1 Operational
risk management
The Risk and Permanent Control Department is responsible for supervising the system,
and it is overseen by the Management Board through the operational risk section of
Crédit Agricole CIB's Internal Control Committee.
GOVERNANCE
Operational risk management specifically relies on a network of permanent controllers,
who also perform the functions of operational risk managers, covering all Group subsidiaries
and business lines, and who are supervised by the Risk Management and Permanent Controls
division.
The system is monitored by Internal control committees under the authority of each
entity's management. Head office Control functions are invited to the meetings of
these committees.
IDENTIFICATION
AND ASSESSMENT OF QUALITATIVE RISKS
In accordance with principles in force within the Crédit Agricole S.A. Group, Crédit
Agricole CIB's Risk and Permanent Control Department implemented a qualitative and
quantitative system designed to identify, assess, prevent and monitor operational
risk, as required by the Basel II reform.
The operational risk mapping process is applied to all Group entities. These risk
maps allow Crédit Agricole CIB to supervise the most sensitive processes and to draw
up control plans. They are annually updated.
DETECTION OF OPERATIONAL
LOSSES AND REPORTING OF SIGNIFICANT INCIDENTS
A unified procedure for loss detection and for reporting significant incidents
has
been set up across the whole scope of Crédit Agricole CIB. The data required by the
internal model for calculating the economic capital allocation, in accordance with
the Basel II advanced method, are consolidated into a single database that provides
historical data for a rolling six year period.
CALCULATION AND
ALLOCATION OF ECONOMIC CAPITAL
Capital requirements are calculated annually at the Crédit Agricole CIB level,
based
on historical loss data together with risk scenarios. Capital requirement is calculated
using the internal AMA methodology (Advanced Measurement Approach) of Crédit Agricole
Group applied on Crédit Agricole CIB's scope. This model has been validated at the
end of 2007 by the French Regulatory and resolution supervisory authority (ACPR).
PRODUCTION OF
OPERATIONAL SCORECARDS
The Risk Management and Permanent Controls Department produces a quarterly operational
risk scorecard, highlighting key events and movements in costs related to these risks.
These scorecards provide global confirmation of the main sources of risks: litigation
with customers and management of processes (including those relating to market transactions)
which determine the priorities of preventative or remedial action plans.
EXPOSURES
The graph below provides the breakdown of the operational losses by nature over
the
2016-2018 period.
INSURANCE AND
RISK COVERAGE
Crédit Agricole CIB has broad insurance coverage of its insurable operating risks
in accordance with guidelines set by its parent company, Crédit Agricole S.A., with
the aim of protecting its balance sheet and its income statement.
Crédit Agricole CIB is covered by all Group policies taken out by Crédit Agricole
S.A. from major high risk insurers, for risks including: fraud, all risk securities
(or theft), operating loss, professional civil liability, operational liability, Executive
and non Executive Corporate Officers' civil liability and property damage (buildings
and IT, third-party claims for buildings with the greatest exposure to this risk).
In addition, Crédit Agricole CIB, like all the Crédit Agricole S.A. Group's business-line
subsidiaries, manages smaller risks itself. High-frequency and low intensity risks
that cannot be insured on satisfactory financial terms are retained in the form of
deductibles or are pooled within the Crédit Agricole S.A. Group by one of the Crédit
Agricole Group's insurance companies.
This general framework may vary according to local regulations and the specific
requirements
of countries in which the Crédit Agricole CIB Group operates. It is generally complemented
by local insurance.
2.7 LEGAL RISKS
The main legal and tax proceedings outstanding for Crédit Agricole CIB and its
fully
consolidated subsidiaries are described in the section on "Legal risks" in the chapter
on "Risk factors and Pillar 3" of the 2017 Registration Document. The cases presented
below are those that have evolved since 23 March 2018, the date on which Registration
Document No D. 18-0176 was filed with the AMF. Any legal risks outstanding at 31 December
2018 that could have a negative impact on the Group's net assets have been covered
by provisions corresponding to the best estimation by the Executive Management on
the basis of the information it had, see Note 6.15 of consolidated financial statements.
To date, to the best of Crédit Agricole CIB's knowledge, there is no other governmental,
judiciary or arbitration proceeding (or any proceeding known by the Company, in abeyance
or that threatens it) that could have or has had, within the previous 12 months, any
substantial effect on the financial situation or the profitability of the Company
and/or the Group.
2.7.1 Exceptional
Events and Disputes
OFFICE OF FOREIGN
ASSETS CONTROL (OFAC)
In October 2015, Crédit Agricole Corporate and Investment Bank (Crédit Agricole
CIB)
and its holding company Crédit Agricole S.A. reached agreements with the US and New
York authorities that had been conducting investigations regarding US dollar transactions
with countries subject to US economic sanctions. The events covered by this agreement
took place between 2003 and 2008. Crédit Agricole CIB and Crédit Agricole S.A., which
cooperated with the US and New York authorities in connection with their investigations,
have agreed to pay a total penalty amount of $787.3 million (i.e. €692.7 million).
The payment of this penalty has been allocated to the pre-existing reserve that had
already been taken and, therefore, has not affected the accounts for the second half
of 2015. The agreements with the Board of Governors of the Federal Reserve System
(Federal Reserve) and the New-York State Department of Financial Services (NYDFS)
are with Crédit Agricole S.A. and Crédit Agricole CIB. The agreement with the Office
of Foreign Assets Control (OFAC) of the US Department of the Treasury is with Crédit
Agricole CIB. Crédit Agricole CIB also entered into separate deferred prosecution
agreements (DPAs) with the United States Attorney's Office for the District of Columbia
(USAO) and the District Attorney of the County of New York (DANY), the terms of which
are three years. On 19 October 2018, the two dispute suspension agreements with USAO
and DANY expired at the end of the three-year period, after Crédit Agricole CIB fulfilled
all of its obligations thereunder.
Crédit Agricole is continuing to strengthen its internal procedures and compliance
programs with the international sanctions regulations, and will continue to cooperate
fully with the US Federal and New York State authorities, as well as with the European
Central Bank, the Prudential Control and Resolution Authority and all regulators throughout
its global network.
Pursuant to the agreements with NYDFS and the US Federal Reserve, Crédit Agricole's
compliance program is subject to regular reviews to evaluate its effectiveness, including
a review by an independent consultant appointed by NYDFS for a term of one year and
annual reviews by an independent consultant approved by the Federal Reserve.
EURIBOR/LIBOR
AND OTHER INDICES
Crédit Agricole CIB and its parent company Crédit Agricole S.A., as contributors
to
several interbank rates, have received requests for information from various authorities
as part of investigations concerning, on the one hand, the determination of the LIBOR
rate (London Interbank Offered Rates) on several currencies, the EURIBOR (Euro Interbank
Offered Rate) rate and certain other market indices, and on the other hand transactions
related to these rates and indices. These demands covered several periods from 2005
to 2012.
As part of its cooperation with the authorities, Crédit Agricole CIB and its holding
company Crédit Agricole S.A. carried out investigations in order to gather the information
requested by the various authorities and in particular the American authorities -
the DOJ (Department of Justice) and CFTC (Commodity Future Trading Commission) - with
which they are in discussions. It is currently not possible to know the outcome of
these discussions, nor the date when they will be concluded.
Furthermore, Crédit Agricole CIB is currently under investigation opened by the
Attorney
General of the State of Florida on both the Libor and the Euribor.
Following its investigation and an unsuccessful settlement procedure, on 21 May
2014,
the European Commission sent a notification of grievances to Crédit Agricole S.A.
and to Crédit Agricole CIB pertaining to agreements or concerted practices for the
purpose and/or effect of preventing, restricting or distorting competition in derivatives
related to the Euribor.
In a decision dated 7 December 2016, the European Commission jointly fined Crédit
Agricole S.A. and Crédit Agricole CIB €114,654,000 for participating in a cartel in
euro interest rate derivatives. Crédit Agricole S.A. and Crédit Agricole CIB are challenging
this decision and have asked the European Court of Justice to overturn it.
Additionally, the Swiss competition authority, COMCO, is conducting an investigation
into the market for interest rate derivatives, including the Euribor, with regard
to Crédit Agricole S.A. and several Swiss and international banks. Moreover, in June
2016 the South Korean competition authority (KFTC) decided to close the investigation
launched in September 2015 into Crédit Agricole CIB and the Libor index on various
currencies, Euribor and Tibor indices. The investigation into certain currency derivatives
(ABS-NDF) was closed by the KFTC, according to a decision notified to Crédit Agricole
CIB on 20 December 2018.
Concerning the two class actions in the United States of America in which Crédit
Agricole
S.A. and Crédit Agricole CIB have been named since 2012 and 2013 along with other
financial institutions, both as defendants in one ("Sullivan" for the Euribor) and
only Crédit Agricole S.A. as defendant for the other ("Lieberman" for Libor), the
"Lieberman" class action is at the preliminary stage of examining the claim's admissibility.
Proceedings are still suspended before the US District Court of New York State. Concerning
the "Sullivan" class action, Crédit Agricole S.A. and Crédit Agricole CIB introduced
a motion to dismiss the applicants' claim. The US District Court of New York State
upheld the motion to dismiss regarding Crédit Agricole S.A. and Crédit Agricole CIB
in first instance. This decision is subject to appeal.
Since 1 July 2016, Crédit Agricole S.A. and Crédit Agricole CIB, together with
other
banks, are also party to a new class action suit in the United States ("Frontpoint")
relating to the SIBOR (Singapore Interbank Offered Rate) and SOR (Singapore Swap Offer
Rate) indices. After accepting a first motion to dismiss presented by Crédit Agricole
S.A. and Crédit Agricole CIB, the Federal Court of New York, ruling on a new claim
by the plaintiffs, dismissed the claims against Crédit Agricole S.A. in the Frontpoint
action, on the grounds that it had not contributed to the indices concerned. On the
other hand, the Court considered, taking into account recent developments in case
law that its jurisdiction could apply to Crédit Agricole CIB, as well as to all the
banks that are members of the SIBOR index panel. The allegations contained in the
SIBOR/USD and SOR suit have also been dismissed by the court, so only the SIBOR/Singapore
Dollar Index is taken into account. On 26 December 2013, the plaintiffs filed a new
complaint seeking to reintroduce the alleged manipulations of the SIBOR and SOR indices
that affected the transactions in US dollars in the Frontpoint action. Crédit Agricole
CIB, along with the other defendants, will oppose this new suit and has filed a new
motion to challenge the court's jurisdiction in the matter.
These class actions are civil actions in which the plaintiffs claim that they are
victims of the methods used to set the Euribor, Libor, SIBOR and SOR rates, and seek
repayment of the sums they allege were unlawfully received, as well as damages and
reimbursement of costs and fees paid.
BANQUE SAUDI FRANSI
Crédit Agricole Corporate Investment Bank (Crédit Agricole CIB) has received a
Request
for Arbitration submitted by Banque Saudi Fransi (BSF) before the International Chamber
of Commerce (ICC). The dispute relates to the performance of a Technical Services
Agreement between BSF and Crédit Agricole CIB that is no longer in force. On 7 August
2018, BSF quantified its claim at SAR 1,011,670,654.00, the equivalent of about €232
million and reserved the right to submit additional claims. Crédit Agricole CIB totally
denies BSF's allegations and claim.
SSA BONDS
Crédit Agricole S.A. and Crédit Agricole CIB have received requests for information
from various regulators, in connection with investigations relating to the activities
of a number of banks participating in the secondary market of SSA (Supranational,
Sub-Sovereign and Agencies) US dollar-denominated bonds. As part of its cooperation
with these regulators, Crédit Agricole CIB conducted internal investigations to gather
the required information available. On 20 December 2018, the European Commission sent
a statement of charges to several banks, including Crédit Agricole S.A. and Crédit
Agricole CIB, in the context of its investigation into a possible infringement of
European competition law on the secondary bond market of SSA US dollar-denominated
bonds. Crédit Agricole S.A. and Crédit Agricole CIB have acknowledged the charges
and will reply to them.
Crédit Agricole CIB is included with other banks in a putative consolidated class
action before the United States District Court for the Southern District of New York.
As the plaintiffs failed to establish sufficient loss, this action was dismissed by
a decision of 29 August 2018, which nevertheless gave them the possibility of remedying
it. On 7 November 2018, the plaintiffs filed an amended complaint. Crédit Agricole
CIB and the other defendants filed "motions to dismiss" the suit.
On 7 February 2019, another class action against Crédit Agricole CIB and the defendants
summoned in the group action already in progress was filed before the U.S Federal
Court for the Southern District of New York.
On 11 July 2018, Crédit Agricole S.A. and Crédit Agricole-CIB received notification,
along with other banks, of a class action filed in Canada before the Federal Court.
Another action, not yet notified, was filed on the same day before the Ontario Superior
Court of Justice. At this stage, it is not possible to know the outcome of these investigations,
proceedings or group actions nor the date on which they will end.
O'SULLIVAN AND
TAVERA
On 9 November 2017, a number of people (or their family members or executors) who
claim to have been the victims of attacks in Iraq, have summoned several banks including
Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB) and its parent
company Crédit Agricole S.A., before the Federal District Court of New York ("O 'Sullivan
I").
On 29 December 2018, the same group of people, joined 57 new plaintiffs, initiated
a separate legal proceeding against the same defendants ("O'Sullivan II").
On 21 December 2018, a different group of people also initiated a separate legal
proceeding
against the same defendants ("Tavera"). The three suits claim that Crédit Agricole
S.A., Crédit Agricole CIB and the other defendants conspired with Iran and its agents
to violate US sanctions and entered into transactions with Iranian entities in violation
of the US Anti-Terrorism Act and Justice Against Sponsors of Terrorism Act. In particular,
they argue that Crédit Agricole S.A., Crédit Agricole CIB and the other defendants
allegedly transacted in US dollar transactions for Iran and Iranian entities in violation
of sanctions imposed by the US Treasury Department's Office of Foreign Assets Control,
which would have allowed Iran to finance terrorist organisations which, it is alleged,
would be the perpetrators of the aforementioned attacks. The plaintiffs are seeking
an unspecified amount of compensatory damages.
On 2 March 2, 2018, Crédit Agricole CIB and other defendants filed a motion to
dismiss
the plaintiffs' claims in the "O'Sullivan I" proceeding.
INTERCONTINENTAL
EXCHANGE, INC. (" ICE ")
On 15 January 2019, a class action was commenced before the US Federal Court Southern
District of New York against Intercontinental Exchange, Inc. ("ICE") and many banks,
including Crédit Agricole S.A. and Crédit Agricole CIB. This action was brought by
plaintiffs who claim to have invested in financial products indexed on ICE's USD LIBOR.
They accuse the banks of having agreed, since February 2014, to set the index artificially
low and to have thus achieved illegal profits.
On 31 January 2019, a similar action was filed before the US Federal Court Southern
District of New York against a number of banks including Crédit Agricole S.A. and
Crédit Agricole CIB. On 1 February 2019 these two actions were consolidated.
BINDING AGREEMENTS
Crédit Agricole CIB is not dependent on any patent, license or industrial, commercial
or financial supply contract.
2.8 NON-COMPLIANCE
RISKS
Non-compliance risk is defined as the risk of judicial, administrative or disciplinary
sanction, significant financial loss or damage to reputation, which arises from non-compliance
with the provisions relating to banking and financial activities, be they legislative,
regulatory, professional or ethical in nature, or instructions from the executive
body, in particular pursuant to the guidelines of the supervisory body.
A compliance control system, which is part of Crédit Agricole CIB Group's permanent
control system, ensures control of these risks.
2.8.1 Prevention
and control of non-compliance risks
Non-compliance risk control within the Crédit Agricole CIB Group is carried out
by
the Compliance Department. The purpose of the Compliance function is to:
| ― |
protect Crédit Agricole CIB against any potentially harmful or
unlawful external actions:
fight against fraud and corruption, prevention of money laundering, fight against
terrorism financing, obligations in the fields of assets freeze and embargoes, etc.;
|
| ― |
protect the Bank's reputation in the markets as well as its clients'
interests against
violations of the internal ethical standards and failures to meet the professional
obligations to which Crédit Agricole CIB Group and its employees are subject (insider
dealing, price manipulation, dissemination of false information, conflicts of interest,
failure to advise, etc.) as well as against internal or mixed fraud and internal corruption.
|
For this purpose, the Compliance Department:
| ― |
provides any useful advice and assists its employees and executive
managers by giving
them advice and training in the field of compliance;
|
| ― |
defines and organises the compliance control mechanism (governance
system, compliance
risk mapping, governance texts, monitoring and controlling systems both for the Head
Office and for entities within the scope of consolidated internal control in France
and internationally);
|
| ― |
carries out or makes carried out necessary a priori or a posteriori
controls, depending
on the activity, and in particular monitors transactions conducted by the Bank for
its own account or for its customers;
|
| ― |
organises, in collaboration with the Risks and Permanent Control
Department, the escalation
of information on possible incidents of compliance and ensures the rapid implementation
of the necessary corrective measures;
|
| ― |
manages the relationships with regulatory and market supervision
authorities;
|
| ― |
provides the necessary reporting on the quality of the mechanism
and the level of
compliance risks to Crédit Agricole S.A.'s Executive Management, Board of Directors,
and Compliance Department, as well as to French and foreign authorities and regulators.
|
The non-compliance risks control system is designed to guard against the risks
of
non-compliance with laws, regulations and internal standards, particularly in relation
to investment services, client protection, the prevention of money laundering and
terrorism financing, compliance with international sanctions and internal and external
fraud prevention. Specific operational management and monitoring resources are used:
staff training, adoption of written internal rules, dedicated tools, permanent compliance
controls, fulfilment of declaration obligations to regulatory authorities, etc. The
Compliance Management Committee oversees the non-compliance risk management system
and ensures its relevance and effectiveness to guarantee an adequate level of security.
At the same time, the Head of Compliance regularly informs Crédit Agricole CIB's governance
and Crédit Agricole S.A.'s Compliance Department of the non-compliance risks incurred
by the Bank.
Crédit Agricole CIB Group's compliance function is part of the Crédit Agricole
S.A.
Group's compliance business line. The Crédit Agricole CIB Group's Compliance business
line includes all compliance teams at the head office and local managers of the international
network and their teams. In order to develop the integration and guarantee the independence
of this function, the hierarchical and functional links are as follows:
| ― |
the Head of Compliance reports hierarchically to the Head of
Compliance of Crédit
Agricole S.A. and functionally to the Chief Executive Officer of Crédit Agricole CIB;
|
| ― |
the Local Compliance Officers of Crédit Agricole CIB's CIB report
hierarchically to
the International Compliance Officer and functionally to the Senior Country Officer.
In some cases specifically approved by the Director of Compliance (Crédit Agricole
CIB Dubai, Crédit Agricole CIB Americas, Crédit Agricole CIB Brazil and Crédit Agricole
CIB Russia), the local system provides for Local Compliance Officers to functionally
report to the local Legal and Compliance Officer;
|
| ― |
the Compliance Manager of the Wealth Management business reports
hierarchically to
the Compliance Director of Crédit Agricole CIB and functionally to the Managing Director
of Private Banking.
|
In 2018, the Compliance business line continued and intensified its actions to
strengthen
its resources in terms of profiles and expertise and adapting its processes.
The Crédit Agricole CIB Compliance organisation therefore revolves around two complementary
axes:
| ― |
a geographical system guaranteeing compliance by each entity
with the Bank's global
compliance rules, as well as laws, regulations and local professional standards, under
the responsibility of the LCO (Local Compliance Officer) who performs the tasks at
local level.
|
| ― |
the Compliance Department at the headquarters consists of 3 operational
divisions
organised by type of compliance risk, and 4 cross-divisional functions, with global
responsibility for their respective areas of compliance, and a central point of entry
both at the headquarters level and at the Crédit Agricole CIB's CIB entities:
| ― |
of Global Business Compliance, responsible for the system for
compliance by businesses
with internal and external standards, such as detection and prevention of market abuse,
anticompetitive behaviour and identification, prevention and management of conflicts
of interest and related controls. In addition, Business Compliance is responsible
for the compliance of the business lines within the meaning of the AMF general regulations,
Article 313-4;
|
| ― |
of Financial Security, responsible for the Bank's overall system
for identification,
mapping, prevention, control and reporting of risk related to financial crime: prevention
of money laundering, combat against the financing of terrorism, obligations on embargoes
and freezing of assets, as well as external corruption. The SF division ensures the
processing and control of financial security alerts at the head office and also intervenes
as a last resort in high-risk situations (embargoes);
|
| ― |
the fight against fraud and corruption, in charge of the prevention
and detection
of corruption and fraud risks within the Bank;
|
| ― |
the General Secretary, in charge of coordinating cross-divisional
topics involving
the Compliance function: governance, reporting, coordination of regulatory monitoring,
interactions with regulators, compliance training strategy and HR topics. The General
Secretary is also in charge of Crédit Agricole CIB's Internal Control and Permanent
Control of the Compliance function and ensures the supervision, coordination and reporting
related to the conformity control system.
|
|
The General Secretary is also in charge of assisting the Bank's General Management
in the decision-making bodies by issuing an opinion covering all non-compliance risks
on the files submitted to it (for example, compliance notices issued by the Bank's
main credit committees);
| ― |
the Data & Processing team, in charge of managing the risks
of non-compliance related
to data processing (including the protection of personal data);
|
| ― |
the Change Management team, in charge of change management within
Compliance, the
digital transformation and the management of Compliance projects;
|
| ― |
International, in charge of exchanging the best practices within
Compliance, to ensure
the coordination of the Local Compliance Officers (LCOs), to align the standards within
the teams and to deploy training for all CPL employees in all locations.
|
Compliance at the CA Indosuez Wealth (Group) holding, which is responsible for
overseeing
and coordinating the entities of the Banque Privee (wealth management), is organised
around three separate areas ("Regulatory Compliance", Financial Security and Fight
against Fraud and Corruption), thus reinforcing the key role Compliance plays in the
governance of the Business Line. These three departments report to the Banque Privée
(wealth management) Compliance Officer.
The Compliance function's main governance body is the Compliance Management Committee,
which includes the Legal (LGL), Finance (FIN), Permanent Control and Risks (RPC) and
Crédit Agricole CIB Periodic Control (GIA) functions. The Compliance Department of
Crédit Agricole S.A. is also a permanent member of this committee. Furthermore, the
Compliance Department is responsible for governance of the NAP system and chairs the
top-level New Activities and Products (NAP) Committee of Crédit Agricole CIB. In 2018,
the Crédit Agricole CIB Compliance Department continued to provide support and advice
to the Bank's Executive Management and business lines.
Furthermore, the Compliance Department has launched various projects and initiatives
to continue improving its organisation, tools and processes and increase its resources.
The aim is to increase its effectiveness in dealing with regulatory changes and the
expectations of regulators, and in general to foster a compliance culture within all
of the Bank's business processes.
Within this framework, a number of projects and initiatives to reinforce the governance
of the system and the management of compliance risks were carried out in 2018, and
notably:
| ― |
taking into account regulatory developments with the continuation
of the ongoing projects,
in particular, MIFID II, Sapin II, General Data Protection Regulation, etc.;
|
| ― |
implementing overall plans to strengthen the non-compliance risk
management system
(beyond purely local initiatives) with the continuation of work on the NAP system,
the launch of work to strengthen the fight against corruption and tax evasion, strengthening
the whistleblowing system through a new tool that allows employees to escalate alerts
in a confidential and secure manner;
|
| ― |
the mobilisation of the teams on the international sanctions
remediation plan (in
particular, on the priority areas): governance, the self-assessment exercise in the
OFAC sanctions risk management system, the deployment of system projects in flow filtering;
|
| ― |
supporting the Bank's Executive Management in its actions to
foster a Compliance culture
with the organisation of the third edition of the Compliance Awards event, which seeks
to recognise and reward efforts to build a Compliance culture, as well as the teams
whose day-to-day work helps to protect the Bank and its clients.
|
5. Basel III Pillar
3 disclosures
3. BASEL III PILLAR
3 DISCLOSURES
(EU) Regulation No 575/2013 of the European Parliament and the Council of 26 June
2013 requires supervised financial institutions (mainly credit institutions and investment
firms) to disclose quantitative and qualitative information on their risk management
activities. Crédit Agricole CIB Group's risk management system and exposure levels
are presented in this section as well as in the "Risk factors" section.
Basel III is based on three pillars:
| ― |
Pillar 1 determines the minimum capital requirements and the
level of ratios according
to the current regulatory framework;
|
| ― |
Pillar 2 completes the regulatory approach with the quantification
of a capital requirement
covering the major risks to which the Bank is exposed, based on the methodologies
specific to it (see part 3.2: "Management of economic capital");
|
| ― |
Pillar 3 establishes new standards for financial communication
to the market; this
must be more detailed concerning the components of regulatory capital and the evaluation
of risks, both at the level of the applicable regulations and the activity over the
period.
|
The Crédit Agricole CIB Group has chosen to disclose information concerning Pillar
3 in a section separate from the section dealing with risk factors, in order to isolate
the items satisfying the prudential requirements in terms of publication.
The principal aim of managing the Group's solvency is to assess its share capital
and at all times ensure that the Group has sufficient capital to cover the risks to
which it is or might be exposed in view of its business activities, thus ensuring
the Group's access to financial markets under the desired conditions.
To achieve this objective, the Group applies the Internal Capital Adequacy and
Assessment
Process (ICAAP).
The internal ICAAP process was developed according to an interpretation of the
principal
regulatory requirements listed below (Basel agreements, European Banking Authority
guidelines, European Central Bank prudential rules). These include:
| ― |
governance of capital management, adapted to the specificities
of the Crédit Agricole
CIB group's subsidiaries, and enabling centralised and coordinated monitoring at the
Group level;
|
| ― |
measurement of regulatory share capital requirements (Pillar
1);
|
| ― |
measurement of economic capital requirements, which is based
on the process of identification
of risks and quantification of the capital requirements according to an internal approach
(Pillar 2);
|
| ― |
management of regulatory share capital requirements based on
forecast, short and medium
term, measurements, consistent with the budget forecast on the basis of a central
macroeconomic scenario;
|
| ― |
the control of ICAAP stress tests, which aim to simulate the
destruction of capital
after three years of an adverse economic scenario (see chapter 5 - Risk Management,
paragraph: "Different types of stress tests" in the 2018 Registration Document);
|
| ― |
the management of economic capital (see part 3.2 "Management
of economic capital");
|
| ― |
and a qualitative ICAAP that stipulates the areas for improvement
in terms of risk
management.
|
The ICAAP is also an integrated process that strongly interacts with the other
strategic
processes of the Group (ILAAP: Internal Liquidity Adequacy and Assessment Process,
risk appetite, budgetary process, recovery plan, identification of risks, etc).
Other than solvency, Crédit Agricole CIB also manages the leverage and resolution
ratios (MREL & TLAC) on its own behalf or on behalf of its contribution to the
Crédit
Agricole group.
Lastly, key solvency ratios are an integral part of the risk appetite system applied
within the Group (described in chapter 5 - Risk management - in the Registration document).
3.1 MANAGEMENT
OF REGULATORY CAPITAL
3.1.1 Scope of
application of the capital requirements for the purposes of regulatory
supervision
Tightening up the regulatory framework, the Basel III agreements have enhanced
the
quality and level of regulatory capital required and have added new risk categories
to the regulatory framework. The legislation concerning the regulatory prudential
requirements applicable to credit institutions and investment firms was published
in the Official Journal of the European Union on 26 June 2013 (Directive 2013/36/EU,
known as "CRD 4", transposed notably by Order No 2014-158 of 20 February 2014 and
Regulation "CRR") and entered into force on 1 January 2014, in accordance with the
transitional provisions specified in the legislation.
Under the CRR/CRD 4 regime, three solvency ratios are calculated:
| ― |
the Common Equity Tier 1 (CET1) ratio;
|
| ― |
the Tier 1 (T1) ratio;
|
| ― |
the total capital ratio.
|
These ratios are the subject of a "phased" calculation intended to gradually manage
the transition between the Basel II calculation rules and those of Basel III. Since
1 January 2018, the transitional treatments have expired, with the exception of those
related to hybrid debt instruments, which remain until 1 January 2022. See "Transitional
provisions".
Two other ratio groups are added to this system:
| ― |
the leverage ratio;
|
| ― |
the resolution ratios.
|
Each of these ratios shows the relationship between a regulatory capital amount
to
a risk exposure. The definitions and calculations are set forth in the following sections.
The minimum requirements applicable to Crédit Agricole CIB Group are met.
3.1.2 Supervision
Credit institutions and certain approved investment activities referred to in Annex
1 to Directive 2004/39/EC are subject to solvency and large exposure ratios on an
individual and, where applicable, "sub-group" basis.
The French Regulatory and Resolution Supervisory Authority (Autorite de contrôle
prudentiel
et de résolution - ACPR) has agreed that certain Group subsidiaries qualify for this
exemption on an individual basis, under the terms set forth in Article 7 of the CRR.
In that regard, the ACPR has provided Crédit Agricole CIB with an exemption on an
individual basis.
The transition to sole supervision by the European Central Bank on 4 November 2014
did not call into question the individual exemptions previously granted by the ACPR.
3.13 Regulatory
supervision scope
Difference between
the accounting and the regulatory scope of consolidation
Entities consolidated for accounting purposes, but excluded from the regulatory
scope
of consolidation of credit institutions on a consolidated basis predominantly comprise
ad hoc entities that are equity-accounted for regulatory purposes. In addition, entities
consolidated for accounting purposes using the proportional method at 31 December
2013 and now consolidated under the equity method for accounting purposes, in accordance
with IFRS 11, continue to be consolidated proportionally for prudential purposes.
Information on these entities as well as their consolidation method for accounting
purposes are presented in the notes to the consolidated financial statements at 31
December 2018.
► Differences
in the treatment of equity investments between the accounting and prudential
scopes
| Type of investment |
Accounting treatment |
Fully loaded Basel III regulatory
capital treatment |
| Subsidiaries with a financial activity |
Consolidation through full consolidation |
Full consolidation giving rise to a capital requirement
as regards the subsidiary's
activities.
|
| Jointly held subsidiaries with a financial activity |
Equity method |
Proportional consolidation. |
| Subsidiaries with an insurance activity |
Consolidation through full consolidation |
CET1 instruments held by more than 10%-owned entities
are deducted from CET1, above
the exemption limit of 17.65% of CET1. This exemption, which is applied after computing
a 10% threshold, is aggregated with the undeducted share of deferred tax assets that
depends on future profitability linked to temporary differences.
|
|
|
|
Deduction of AT1 and T2 instruments at the level of their
respective capital. |
| Investments of more than 10% that have a financial activity
by type |
Equity method Investments in credit institutions |
CET1 instruments held by more than 10%-owned entities
are deducted from CET1, above
the exemption limit of 17.65% of CET1. This exemption, which is applied after computing
a 10% threshold, is aggregated with the undeducted share of deferred tax assets that
depends on future profitability linked to temporary differences.
|
|
|
|
Deduction of AT1 and T2 instruments at the level of their
respective capital. |
| Investments of 10% or less that have a financial or insurance
activity |
Equity investments and securities available for sale |
Deduction of CET1, AT1 and T2 instruments in entities
where the ownership interest
is less than 10%, above an exemption limit of 10% of CET1.
|
| Vehicles for the securitisation of the ABCP activity |
Full consolidation |
Risk-weighting of equity-accounted amount and commitments
made on these entities (liquidities
facilities and letters of credit).
|
► Differences
between accounting and regulatory scopes of consolidation and mapping
of financial statement categories with regulatory risk categories (LI1)
|
|
31.12.2018 |
|
|
|
Carrying values of
items |
| € billion |
Carrying values as reported in
published financial statements |
Carrying values under scope of
regulatory consolidation |
Subject to credit risk framework |
Subject to counterparty credit
risk framework |
Subject to the securitisation framework |
Subject to the market risk framework |
| Assets |
|
|
|
|
|
|
| Cash, central banks |
47 |
47 |
47 |
|
|
|
| Financial assets at fair value through profit or loss |
241 |
241 |
|
220 |
|
128 |
| Other financial assets at fair value through profit or
loss |
|
|
|
|
|
|
| Hedging derivative instruments |
1 |
1 |
|
1 |
|
|
| Financial assets at fair value through own funds |
10 |
11 |
7 |
|
3 |
|
| Accounted own funds' instruments at fair value through
non recyclable own funds |
2 |
2 |
2 |
|
|
|
| Loans and receivables due from credit institutions |
19 |
19 |
18 |
1 |
|
|
| Loans and receivables due from customers |
134 |
135 |
134 |
|
|
|
| Held-to-maturity financial assets |
28 |
18 |
18 |
|
|
|
| Revaluation adjustment on interest rate hedged portfolios |
|
|
|
|
|
|
| Deferred tax assets |
1 |
1 |
1 |
|
|
|
| Accruals, prepayments and sundry assets |
28 |
28 |
22 |
6 |
|
2 |
| Non-current assets held for sale |
|
|
|
|
|
|
| Deferred participation benefits |
|
|
|
|
|
|
| Investments in equity-accounted entities |
|
|
|
|
|
|
| Investment property |
|
|
|
|
|
|
| Property, plant and equipment |
|
|
|
|
|
|
| Intangible assets |
|
|
|
|
|
|
| Goodwill |
1 |
1 |
|
|
|
|
| Total assets |
512 |
504 |
251 |
227 |
3 |
130 |
| Liabilities |
|
|
|
|
|
|
| Central banks |
1 |
1 |
|
|
|
|
| Available-for-sale financial liabilities |
208 |
208 |
|
76 |
|
|
| Financial liabilities at fair value through options |
27 |
27 |
|
|
|
|
| Hedging derivative instruments |
1 |
1 |
|
|
|
|
| Due to credit institutions |
47 |
48 |
|
2 |
|
|
| Due to customers |
124 |
142 |
|
1 |
|
|
| Debt securities |
52 |
25 |
|
|
|
|
| Revaluation adjustment on interest rate hedged portfolios |
|
|
|
|
|
|
| Current and deferred tax liabilities |
2 |
2 |
2 |
|
|
|
| Accruals, deferred income and sundry liabilities |
23 |
23 |
4 |
|
|
|
| Liabilities associated with non-current assets held for
sale Insurance company technical
reserves
|
|
|
|
|
|
|
| Provisions |
2 |
2 |
|
|
|
|
| Subordinated debt |
5 |
5 |
|
|
|
|
| Total liabilities |
491 |
483 |
6 |
78 |
|
|
| Equity |
20 |
20 |
|
|
|
|
| Equity, Group share |
20 |
20 |
|
|
|
|
| Share capital and reserves |
13 |
13 |
|
|
|
|
| Consolidated reserves |
6 |
6 |
|
|
|
|
| Other comprehensive income |
|
|
|
|
|
|
| Other comprehensive income on non-current assets held
for sale and discontinued operations |
|
|
|
|
|
|
| Net income/(loss) for the year |
1 |
1 |
|
|
|
|
| Non-controlling interests |
|
|
|
|
|
|
| Total equity and liabilities |
512 |
504 |
6 |
78 |
|
|
|
|
31.12.2018 |
|
|
Carrying values of items |
| € billion |
Not subject to capital requirements or subject to deduction
from capital |
| Assets |
|
| Cash, central banks |
|
| Financial assets at fair value through profit or loss |
|
| Other financial assets at fair value through profit or
loss |
|
| Hedging derivative instruments |
|
| Financial assets at fair value through own funds |
|
| Accounted own funds' instruments at fair value through
non recyclable own funds |
|
| Loans and receivables due from credit institutions |
|
| Loans and receivables due from customers |
|
| Held-to-maturity financial assets |
|
| Revaluation adjustment on interest rate hedged portfolios |
|
| Deferred tax assets |
|
| Accruals, prepayments and sundry assets |
|
| Non-current assets held for sale |
|
| Deferred participation benefits |
|
| Investments in equity-accounted entities |
|
| Investment property |
|
| Property, plant and equipment |
|
| Intangible assets |
|
| Goodwill |
1 |
| Total assets |
1 |
| Liabilities |
|
| Central banks |
1 |
| Available-for-sale financial liabilities |
132 |
| Financial liabilities at fair value through options |
27 |
| Hedging derivative instruments |
1 |
| Due to credit institutions |
46 |
| Due to customers |
141 |
| Debt securities |
25 |
| Revaluation adjustment on interest rate hedged portfolios |
|
| Current and deferred tax liabilities |
|
| Accruals, deferred income and sundry liabilities |
19 |
| Liabilities associated with non-current assets held for
sale Insurance company technical
reserves
|
|
| Provisions |
2 |
| Subordinated debt |
5 |
| Total liabilities |
399 |
| Equity |
20 |
| Equity, Group share |
20 |
| Share capital and reserves |
13 |
| Consolidated reserves |
6 |
| Other comprehensive income |
|
| Other comprehensive income on non-current assets held
for sale and discontinued operations |
|
| Net income/(loss) for the year |
1 |
| Non-controlling interests |
|
| Total equity and liabilities |
419 |
The carrying amounts for the regulatory scope of consolidation (column b) are not
equal to the sum of their breakdown by the risk (coloumns c to g) as an exposure may
be subject to several types of risk.
3.1.4 Overall
process
♦ Capital planning
Regulatory capital is controlled under a planning process called capital planning.
Capital planning is intended to provide projections of equity capital and the use
of scarce resources (risk weighted assets and balance sheet) over the horizon of the
Medium Term Plan underway on the scope of consolidation of the Crédit Agricole CIB
group and on its contribution to the Crédit Agricole group, in order to prepare trajectories
of solvency (CET1, Tier 1 and total capital), leverage and resolution (MREL and TLAC)
ratios.
It applies the budgetary elements of the financial trajectory, including projected
structural transactions, accounting and prudential regulatory developments and model
effects applied to risk bases. It also translates the issuance policy (subordinated
debt and debt eligible for TLAC) and the distribution policy with regard to the capital
structure objectives defined to be consistent with the strategy of the Group.
It determines the margins for manoeuvre within which the Group can grow, It also
enables
compliance with the various prudential requirements and the distribution restriction
threshold to be verified, and is used to calculate the maximum distributable amount
as defined by the CRR for Additional Tier 1 debt. It is also used for setting the
various risk thresholds adopted for the risk appetite. The capital planning is presented
to various governance bodies and is communicated to the competent authorities, either
in the context of regular exchanges or for specific transactions (for example, requests
for authorisation).
♦ Governance
The Scarce Ressources Committee meets each quarter, chaired by the Deputy Chief
Executive
Officer in charge of finance, and including the head of risk management, the head
of financial control, the head of cash management and financing, and representatives
of Crédit Agricole S.A.
The main tasks of this committee are:
| ― |
review the short and medium term projections of the Crédit Agricole
CIB group in matters
of solvency, leverage and resolution;
|
| ― |
validate the structural assumptions affecting solvency in coherence
with the medium-term
plan;
|
| ― |
set the rules for the management and allocation of capital within
the group between
the various business lines of the bank;
|
| ― |
decide the liability management operations (management of subordinated
debt);
|
| ― |
discuss subjects relative to economic capital;
|
| ― |
obtain news concerning supervision and regulation;
|
| ― |
study relevant problems concerning subsidiaries;
|
| ― |
prepare any decisions to be submitted to the Board of Directors.
|
3.1.5 Solvency
ratios
♦ Solvency ratios
numerator (see part 3.1.6 "Definition of capital")
Basel III defines three levels of capital:
| ― |
Common Equity Tier 1 (CET1);
|
| ― |
Tier 1 capital, which consists of Common Equity Tier 1 and Additional
Tier 1 capital
(AT1);
|
| ― |
Total capital, consisting of Tier 1 capital and Tier 2 capital.
|
♦ Solvency ratios
denominator (see part 3.4 "Composition and changes in risk weighted
assets")
Basel III defines several types of risk: credit risks, market risks and operational
risks, which give rise to risk weighted asset calculations. These are discussed hereafter.
Pursuant to Regulation (EU) no. 575/2013 of 26 June 2013, two approaches are used
to measure exposure to credit risk:
| ― |
the standardised approach, which is based on external credit
ratings and fixed weightings
for each Basel exposure class;
|
| ― |
the Internal Ratings Based approach (IRB), which is based on
the bank's own internal
rating system.
|
There are two subsets of the IRB approach:
| ― |
the "Foundation Internal Ratings-Based" approach, under which
institutions may use
exclusively their own default probability estimates;
|
| ― |
the "Advanced Internal Ratings-Based" approach, under which institutions
use all their
internal estimates of risk components: probability of default, loss given default,
exposures given default, maturity.
|
MINIMUM REQUIREMENTS
OF PILLAR 1
Pillar 1 requirements are governed by Regulation (EU) 575/2013 of the European
Parliament
and of the Council on 26 June 2013 (CRR). The regulator sets additional minimum requirements
in a discretionary manner through Pillar 2.
♦ Minimum requirements
of Pillar 1
Capital ratios before buffers: the minimum phased-in CET1 requirement is 4.5%.
The
minimum phased-in Tier 1 requirement is 6% and the minimum phased-in total capital
requirement stood at 8%.
Capital buffers are added to these ratios, to be applied progressively:
| ― |
the capital conservation buffer (2.5% of risk weighted assets
in 2019);
|
| ― |
the countercyclical buffer (rate in principle within a range
of 0 to 2.5%), the buffer
at the Group level being an average weighted by the values exposed to relevant risk
(EAD (1)) for the buffers defined at the level of each country where the
Group operates; when
the rate of a countercyclical buffer is calculated at the level of one of the countries
of operation, the date of application is no more than 12 months after the date of
publication, except in the case of exceptional circumstances;
|
| ― |
the buffer for systemic risk and for Global Systemically Important
Banks (G-SIB) (in
the range 0% to 3.5%). These two buffers are not cumulative, with double counting
eliminated by the regulator of the consolidating entity. Only Crédit Agricole Group
is a G-SIB. Crédit Agricole CIB does not fall within this category.
|
These buffers come into force on an incremental basis from 1 January 2016 to 2019
(25% of the required buffer in 2016, 50% in 2017, etc.). The buffer for systemic risk
can be implemented by a national authority if it provides documentary evidence to
the European Banking Authority.
At the end of 2018, countercyclical buffers on Hong Kong, Iceland, Norway, the
Czech
Republic, the United Kingdom, Slovakia and Sweden were recognised by the High Council
for Financial Stability (HCSF). In 2019, countercyclical buffers on France, Lithuania
and Denmark will also come into force. Concerning French exposure, the High Council
for Financial Stability (HCSF) will bring this rate to 0.25% from the date of entry
into force on 1 July 2019. Given
the exposure of the Group in these countries, the countercyclical buffer rate for
the Group on 31 December 2018 stands at 0.10%. It will reach 0.21% at the end of June
2019, in particular to take into account the entry into force of the French countercyclical
buffer on 1 July 2019.
These buffers must be covered by CET1.
(1)
The EAD is the amount in the event of default. It encompasses balance sheet assets
plus a proportion of off-balance sheet commitments.
► Minimum requirements
on the basis of information known at the end of December 2018
| 1 January... |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
| Common Equity Tier 1 |
4.00% |
4.50% |
4.50% |
4.50% |
4.50% |
4.50% |
| Tier 1 (CET1 + AT1) |
5.50% |
6.00% |
6.00% |
6.00% |
6.00% |
6.00% |
| Tier 1 + Tier 2 |
8.00% |
8.00% |
8.00% |
8.00% |
8.00% |
8.00% |
| Capital conversation buffer |
|
|
0.63% |
1.25% |
1.88% |
2.50% |
| Countercyclical buffer (0% to 2,5%) |
|
|
0.00% |
0.03% |
0.11% |
(1) 0.21%
|
| Systemic risk buffer (0% to 5%) |
|
|
0.00% |
0.00% |
0.00% |
0.00% |
(1)
Estimate from 1 July 2019, taking into account the announcement of the HCSF concerning
the establishment of a buffer on France.
► Details of the
calculation of the countercyclical buffer at the end of December
2018
|
|
31.12.2018 |
|
|
General credit exposures |
Trading book exposure |
Securitisation exposure |
| € million |
Standard approach |
IRB approach |
Sum of long and short position
of trading book |
Value of trading book exposure
for internal models |
Standard approach |
IRB approach |
| Norway |
|
720 |
|
|
|
|
| Sweden |
30 |
1,690 |
|
|
|
27 |
| Hong Kong |
345 |
3,597 |
|
|
|
|
| Iceland |
|
|
|
|
|
|
| Czech Republic |
|
67 |
|
|
|
|
| United Kingdom |
237 |
12,804 |
|
|
|
1,644 |
| Lituania |
|
1 |
|
|
|
|
| Slovakia |
|
13 |
|
|
|
|
| France |
5,906 |
40,345 |
203 |
2,502 |
221 |
12,874 |
| Other countries (1) |
3,999 |
131,845 |
|
|
1,787 |
30,356 |
| Total |
10,517 |
191,082 |
203 |
2,502 |
2,008 |
44,901 |
|
|
31.12.2018 |
|
|
Own funds requirements |
| € million |
General credit exposure |
Trading book exposure |
Securitisation de titrisation |
Total |
Breakdown by country (in %)
|
| Norway |
16 |
|
|
16 |
0.260% |
| Sweden |
68 |
|
|
68 |
1.089% |
| Hong Kong |
84 |
|
|
84 |
1.333% |
| Iceland |
|
|
|
|
|
| Czech Republic |
2 |
|
|
2 |
0.029% |
| United Kingdom |
322 |
|
12 |
334 |
5.290% |
| Lituania |
|
|
|
|
0.001% |
| Slovakia |
|
|
|
|
0.006% |
| France |
1,417 |
216 |
140 |
1,773 |
28.145% |
| Other countries (1) |
3,666 |
|
359 |
4,025 |
63.869% |
| Total |
5,575 |
216 |
511 |
6,302 |
100.000% |
|
|
31.12.2018 |
|
|
Countercyclical capital buffer
rate (in %) 31.12.2018 |
Countercyclical capital buffer
rate forecast (in %) 31.12.2019 |
| € million |
|
|
| Norway |
2.00% |
0.01% |
| Sweden |
2.00% |
0.02% |
| Hong Kong |
1.88% |
0.03% |
| Iceland |
1.25% |
|
| Czech Republic |
1.00% |
|
| United Kingdom |
1.00% |
0.05% |
| Lituania |
0.50% |
|
| Slovakia |
1.25% |
|
| France |
|
|
| Other countries (1) |
|
|
| Total |
|
0.105% |
(1)
For which no countercyclical buffer has been defined by the competent authority
► Crédit agricole
CIB group's total capital requirement, including buffers known at
the end of December 2018
| 1er janvier...
|
2014 |
2015 |
2016 |
2017 |
2018 |
| CET1 + buffer |
4.00% |
4.50% |
5.13% |
5.78% |
6.49% |
| T1 + buffer |
5.50% |
6.00% |
6.63% |
7.28% |
7.99% |
| T1 + T2 + buffer |
8.00% |
8.00% |
8.63% |
9.28% |
9.99% |
♦ Minimum requirements
of pillar 2
Crédit Agricole CIB was notified by the European Central Bank (ECB) in 2017 of
the
new minimum capital requirements following the results of the Supervisory Review and
Evaluation Process (SREP).
Since 2017, the ECB has developed the methodology used, dividing the prudential
requirement
into two parts:
| ― |
a Pillar 2 Requirement (P2R). This requirement applies to all
levels of equity capital
and must be made up entirely of common equity Tier 1 capital; non-compliance with
this requirement leads automatically to distribution restrictions (super-subordinated
debt coupons, dividends, variable remunerations). Consequently, this requirement is
public;
|
| ― |
Pillar 2 Guidance (P2G). At this stage, this requirement is not
public.
|
On 31 December 2018, Crédit Agricole CIB must respect a minimum consolidated CET1
ratio (including the Pillar 1, Pillar 2R and the capital conservation buffer) of 7.98%
(phased in), i.e. 8.6% fully loaded.
3.1.6 Definition
of capital
3.1.6.1 TIER 1
CAPITAL
This includes Common Equity Tier 1 (CET1) and Additional Tier 1 (AT1).
♦ Common Equity
Tier 1 (CET1)
This includes:
| ― |
capital;
|
| ― |
reserves, including share premiums, retained earnings, net income
after dividends
and other accumulated comprehensive income including unrealised capital gains and
losses on available-for-sale financial assets, as described in the point on the solvency
ratio reform;
|
| ― |
non-controlling interests, which, as indicated in point III on
the solvency ratio
reform, are now subject to limited recognition or even exclusion, depending on whether
or not the subsidiary is an eligible credit institution;
|
| ― |
deductions are detailed above and include the following items:
| ― |
treasury shares held and valued at their net carrying amount,
|
| ― |
intangible assets, including start-up costs and goodwill,
|
| ― |
the prudent valuation (prudent valuation defined by the prudential
regulations: adjustment
of the amount of assets and liabilities measured at fair value according to a prudential
method and deducting any value corrections),
|
| ― |
deduction from the CET1 of Deferred Tax Assets (DTAs) that rely
on future profitability
arising from tax loss carryforwards,
|
| ― |
deduction from the CET1 of negative amounts resulting from a
deficit in provisions
compared to expected losses (EL),
|
| ― |
deduction from the CET1 of instruments of the CET1 held in financial
investments less
than or equal to 10% beyond an exemption limit of 10% of CET1 capital; the elements
not deducted are taken into account in the risk weighted assets (variable weighting
according to the types of instruments and the Basel method),
|
| ― |
deduction from the CET1 of deferred tax assets dependent on future
profits related
to time differences beyond an exemption limit of 17.65% of CET1 capital; this exemption,
applied after application of a first exemption of 10% of CET1, is common with the
non-deducted share of the instruments of CET1 held in financial investments greater
than 10%; the elements not deducted are taken into account in the risk weighted assets
(weighting at 250%),
|
| ― |
the deduction from the CET1 of instruments of CET1 held in financial
investments greater
than 10% (significant investments) beyond an exemption limit of 17.65% of CET1 capital;
this exemption, applied after application of a first exemption of 10% of CET1, is
common with the non-deducted share of deferred tax assets dependent on future profits
related to time differences; the elements not deducted are taken into account in the
risk weighted assets (weighting at 250%),
|
| ― |
deductions pursuant to the Single Resolution Fund and the Deposit
Guarantee and Resolution
Fund.
|
|
Since 1 January 2018, the Group has applied the IFRS 9 standard on financial instruments.
As this standard is applied retrospectively, the impact related to the new principles
concerning the classification and valuation of financial instruments and impairment
from credit risk were fully taken into account in the Group's capital.
♦ Additional Tier
1 capital (AT1)
ADDITIONAL TIER
1 CAPITAL ELIGIBLE UNDER BASEL III ON A FULLY LOADED BASIS
Additional Tier 1 (AT1) capital eligible under Basel III consists of perpetual
debt
instruments without any redemption incentive or obligation (in particular step-up
features).
AT1 instruments must be subject to a loss absorption mechanism triggered when the
CET1 ratio falls below a threshold of at least 5.75%. The instruments may be converted
into shares or written down. Payments must be completely flexible: no automatic remuneration
mechanisms allowed, suspension of coupon payments at the issuer's discretion permitted.
Equity instruments in financial sector entities related to this compartment (AT1)
are deducted along with those resulting from transitional application rules.
The following table shows the stock of AT1 with issues eligible under Basel III,
conducted
since 2015 and those not eligible after maturities and redemptions, but excluding
the impact of the cap resulting from the grandfathering provision.
The Basel III eligible issue has two loss absorption mechanisms that are triggered
when Crédit Agricole CIB Group's phased-in CET1 ratio drops below 5.75%.
Crédit Agricole CIB Group's phased-in CET1 ratio was 11.5% at 31 December 2018.
They
accordingly represent a capital buffer of €6.8 billion relative to the loss absorption
thresholds.
At 31 December 2018, there was no applicable restriction on the payment of coupons.
ADDITIONAL TIER
1 CAPITAL ELIGIBLE ON A PHASED-IN BASIS
During the transitional phase, the amount of Tier 1 capital used in the ratios
corresponds
to:
| ― |
additional Tier 1 capital eligible under Basel III (AT1) and;
|
| ― |
a portion of ineligible Tier 1, equal to the minimum of the actual
amount of ineligible
Tier 1 instruments on the date of closure (post amortisation, any calls, redemptions,
etc.), of 40% (threshold for the 2018 financial year) of the stock of Tier 1 existing
on 31 December 2012. The stock of Tier 1 capital outstanding at 31 December 2012 totalled
€4.6 billion, or a maximum recognisable amount of €1.8 billion.
|
The amount of Tier 1 capital exceeding the prudential threshold is integrated into
phased-in Tier 2 capital, up to the regulatory capital threshold applicable to Tier
2 capital.
► Deeply subordinated
notes and preferred shares at 31 December 2018
| Issuer |
Issue date |
Amount of issue (in million)
|
Currency |
Dates of Call |
Compensation |
Step-up (Y/N) |
| Deeply subordinated notes |
|
|
|
|
|
|
| Crédit Agricole CIB |
21/12/2005 |
85 |
USD |
01/01/2016 then annually |
Libor12M +150 bps |
N |
| Crédit Agricole CIB |
28/09/2007 |
1,000 |
USD |
01/01/2018 then annually |
Libor12M +252 bps |
N |
| Crédit Agricole CIB |
28/09/2007 |
590 |
EUR |
43 101 |
Euribor12M +190bps then as from 01/01/2018 Libor12M +290bps |
O |
| Crédit Agricole CIB |
19/03/2004 |
500 |
USD |
01/01/2014 then annually |
5,81% then as from 01/01/2014 Libor 12M+170 bps |
N |
| Crédit Agricole CIB |
04/05/2004 |
470 |
USD |
01/01/2014 then annually |
6,48% then as from 01/01/2014 Libor 12M+156 bps |
N |
| Crédit Agricole CIB |
16/11/2015 |
600 |
EUR |
23/12/2020 then quarterly |
Euribor3M +679.5 bps |
N |
| Crédit Agricole CIB |
16/11/2015 |
600 |
EUR |
23/12/2022 then quarterly |
Euribor3M +670.5 bps |
N |
| Crédit Agricole CIB |
16/11/2015 |
600 |
EUR |
23/12/2025 then quarterly |
Euribor3M +663 bps |
N |
| Crédit Agricole CIB |
09/06/2016 |
720 |
USD |
23/06/2026 then quarterly |
Libor3M +686 bps |
N |
| Crédit Agricole CIB |
27/06/2018 |
500 |
EUR |
27/06/2028 then quarterly |
Euribor3M +535 bps |
N |
| Crédit Agricole CIB |
29/09/2018 |
500 |
EUR |
24/09/2028 then quarterly |
Euribor3M +485 bps |
N |
| Preferred shares (equivalent to deeply subordinated notes) |
|
|
|
|
|
|
| Indosuez Holdings II S.C.A |
22/12/1993 |
80 |
USD |
22/12/2008 then at any time |
Libor6M +230 bps |
N |
| Total |
|
|
|
|
|
|
| Issuer |
Regulatory treatment |
Eligible under CRD4 (Y/N) |
Coupon suspension conditions |
Write down condition |
Regulatory amount at (in million
of euros)(1) |
Regulatory amount at 31.12.2017
(in million of euros)(1) |
| Deeply subordinated notes |
|
|
|
|
|
|
| Crédit Agricole CIB |
T1 |
N |
Reduction that may lead to non-payment of interest in
the event of insufficient earnings |
Occurrence of a regulatory event |
74 |
71 |
| Crédit Agricole CIB |
T1 |
N |
Reduction that may lead to non-payment of interest in
the event of insufficient earnings |
Occurrence of a regulatory event |
872 |
834 |
| Crédit Agricole CIB |
T1 |
N |
Reduction that may lead to non-payment of interest in
the event of insufficient earnings |
Occurrence of a regulatory event |
|
590 |
| Crédit Agricole CIB |
T1 |
N |
Reduction that may lead to non-payment of interest in
the event of insufficient earnings |
Occurrence of a regulatory event |
436 |
417 |
| Crédit Agricole CIB |
T1 |
N |
Reduction that may lead to non-payment of interest in
the event of insufficient earnings |
Occurrence of a regulatory event |
410 |
392 |
| Crédit Agricole CIB |
NA |
O |
At issuer's or supervisor's discretion; subject to limitations
applied in the event
of noncompliance with CACIB's overall requirements
|
Occurrence of a regulatory event |
600 |
600 |
| Crédit Agricole CIB |
NA |
O |
At issuer's or supervisor's discretion; subject to limitations
applied in the event
of noncompliance with CACIB's overall requirements
|
Occurrence of a regulatory event |
600 |
600 |
| Crédit Agricole CIB |
NA |
O |
At issuer's or supervisor's discretion; subject to limitations
applied in the event
of noncompliance with CACIB's overall requirements
|
Occurrence of a regulatory event |
600 |
600 |
| Crédit Agricole CIB |
NA |
O |
At issuer's or supervisor's discretion; subject to limitations
applied in the event
of noncompliance with CACIB's overall requirements
|
Occurrence of a regulatory event |
628 |
601 |
| Crédit Agricole CIB |
NA |
O |
At issuer's or supervisor's discretion; subject to limitations
applied in the event
of noncompliance with CACIB's overall requirements
|
Occurrence of a regulatory event |
500 |
|
| Crédit Agricole CIB |
NA |
O |
At issuer's or supervisor's discretion; subject to limitations
applied in the event
of noncompliance with CACIB's overall requirements
|
Occurrence of a regulatory event |
500 |
|
| Preferred shares (equivalent to deeply subordinated notes) |
|
|
|
|
|
|
| Indosuez Holdings II S.C.A |
T1 |
N |
Reduction that may lead to non-payment of interest in
the event of insufficient earnings |
|
70 |
67 |
| Total |
|
|
|
|
5,291 |
4,772 |
(1)
Amounts before application of the Basel III grandfathering provisions.
The application of this grandfathering clause means that the total of CRD IV ineligible
deeply subordinated notes and preference shares retained in Tier 1 capital stands
at €1,829 million.
NB: the totality of Tier 1 is eligible for grandfathering up to the step-up date
for
innovative securities or up to the deadline for recognition stipulated in the regulations.
3.1.6.2 TIER 2
CAPITAL
This includes:
| ― |
subordinated debt instruments which must have a minimum maturity
of 5 years. Incentives
for early redemption are prohibited.
these instruments are subject to a haircut during the five-year
period prior to their
maturity date;
|
| ― |
the grandfathering clause is the same as that presented for AT1
above;
|
| ― |
eligible excess provisions relative to expected losses determined
using the internal
ratings-based approach are limited to 0.6% of IRB risk-weighted assets. Moreover,
adjustments for general credit risk including tax impacts may be included for up to
1.25% of risk weighted assets in the standard method;
|
| ― |
deductions of equity instruments in financial-sector entities
related to this tier
(predominantly in the insurance sector, since most subordinated banking receivables
are not eligible.
|
The amount of Tier 2 included in the ratios represents:
| ― |
on a fully loaded basis: CRD IV eligible Tier 2;
|
| ― |
on a phased-in basis: CRD IV eligible Tier 2, plus the lower of:
| ― |
ineligible Tier 2 instruments and, where applicable, the transfer
of Tier 1 instruments
exceeding the 50% threshold of ineligible Tier 1 instruments;
|
| ― |
40% of the CRD IV ineligible Tier 2 stock at 31 December 2012.
|
|
► Undated subordinated
notes
| Issuer |
Date of issue |
Amount of issue (€ million)
|
Currency |
Call dates |
Compensation |
Step-up (Y/N) |
| Undated subordinated notes |
|
|
|
|
|
|
| Crédit Agricole CIB |
12/08/1998 |
30 |
EUR |
12/08/2003 then at any time |
Euribor3M, +55,bps |
N |
| Total |
|
|
|
|
|
|
| Issuer |
Regulatory treatment |
CRD4 eligibilty (Y/N) |
Regulatory capital amount 31.12.2018
€ million
|
Regulatory capital amount 31.12.2017
€ million
|
| Undated subordinated notes |
|
|
|
|
| Crédit Agricole CIB |
T2 |
N |
30 |
30 |
| Total |
|
|
30 |
30 |
► Subordinated
loans
| Issuer |
Date of issue |
Amount of issue (€ million) |
Currency |
Call dates |
Compensation |
Step-up (Y/N) |
| Subordinated loans |
|
|
|
|
|
|
| Crédit Agricole CIB |
26/03/2015 |
1,700 |
15/03/2025 |
USD |
15/03/2020 then quarterly |
Libor3M +252 bps |
| Crédit Agricole CIB |
20/06/2016 |
750 |
20/06/2026 |
EUR |
- |
Libor3M +255 bps |
| Crédit Agricole CIB |
07/11/2016 |
500 |
07/11/2026 |
EUR |
07/11/2021 then quarterly |
Euribor3M +212.2 bps |
| Crédit Agricole CIB |
13/02/2018 |
250 |
14/02/2028 |
EUR |
- |
Euribor3M +111 bps |
| Total |
|
|
|
|
|
|
| Issuer |
Regulatory treatment |
CRD4 eligibilty (Y/N) |
Issuer |
Regulatory capital amount 31.12.2018
€ million
|
Regulatory capital amount 31.12.2017
€ million
|
| Subordinated loans |
|
|
|
|
|
| Crédit Agricole CIB |
N |
T2 |
Y |
1,483 |
1,418 |
| Crédit Agricole CIB |
N |
T2 |
Y |
750 |
750 |
| Crédit Agricole CIB |
N |
T2 |
Y |
500 |
500 |
| Crédit Agricole CIB |
N |
T2 |
Y |
250 |
|
| Total |
|
|
|
2,983 |
2,668 |
3.1.6.3 TRANISTIONAL
PROVISIONS
To make it easier for credit institutions to comply with CRR/CRD IV, certain requirements
were relaxed on a transitional basis, notably the gradual introduction of new capital
component.
There have not been any phased-in elements of CET1 since 1 January 2018, only the
hybrid debt instruments still benefit from a transitional period until 1 January 2022.
You will recall that the hybrid debt instruments that were eligible for capital under
Basel II and which are no longer eligible as capital owing to the entry into force
of the new regulation can, under certain conditions, be eligible for the grandfathering
clause. Under this clause, these instruments are gradually excluded over an eight-year
period, with a 10% reduction each year. In 2018, 40% of the global inventories declared
at 31 December 2012 is recognised, and then 30% in 2019, etc. The derecognised portion
may be recognised in the lowest tier of capital (from AT1 to Tier 2, for example)
if it satisfies the corresponding criteria.
3.1.6.4 SIMPLIFIED
PRUDENTIAL CAPITAL AS AT 31 DECEMBER 2018
► Solvency ratios
|
|
31.12.2018 |
31.12.2017 |
| € million |
Phased-in |
Fully loaded |
Phased-in |
Fully loaded |
| Capital and reserves Group share (1) |
16,165 |
|
15,267 |
15,355 |
| (+) Tier 1 capital in accordance with French Prudential
Supervisory and Resolution
Authority stipulations (shareholder advance)
|
|
|
|
|
| (+) Minority interests (1) |
112 |
112 |
96 |
|
| (-) Prudent valuation |
(840) |
(840) |
(532) |
(532) |
| (-) Deductions of goodwill and other intangible assets |
(1,327) |
(1,327) |
(1,219) |
(1,219) |
| (-) Deferred tax assets that rely on future profitability
not arising from temporary
differences after deduction of the associated tax liabilities
|
(26) |
(26) |
(44) |
(55) |
| (-) Shortfall in adjustments for credit risk relative
to expected losses under the
internal ratings-based approach deducted from the CET1
|
(7) |
(7) |
(6) |
(6) |
| (-) Amount exceeding the exemption threshold for CET1
instruments of financial stakes
in which the institution owns a significant holding and of the deductible deferred
tax assets that rely on future profitability arising from temporary differences (2) |
(100) |
(100) |
|
|
| CET1 instruments held by financial sector entities in
which the credit institution
has a significant investment
|
1,478 |
1,478 |
1,307 |
1,307 |
| The deductible deferred tax assets that rely on future
profitaility arising from temporary
differences
|
344 |
344 |
211 |
211 |
| Utilisation of the exemption thershold of 10% (i) individually
for CET 1 instruments
of financial sector entities on the one hand (ii) deferred tax on the other hand
|
1,379 |
1,379 |
1,343 |
1,343 |
| (-) Transparent treatment of UCITS |
(9) |
(9) |
(8) |
(8) |
| Transitional adjustments and other deductions applicable
to CET1 capital |
(282) |
(282) |
(105) |
(105) |
| Common equity tier 1 (CET1) |
13,686 |
13,686 |
13,449 |
13,429 |
| Equity instruments eligible as AT1 capital |
3,435 |
3,435 |
2,435 |
2,435 |
| Ineligible AT1 equity instruments qualifying under grandfathering
clause |
1,863 |
|
2,346 |
|
| Tier 1 or Tier 2 instruments of entities operating mainly
in the insurance sector
in which the institution has a significant investment deducted from Tier 1 capital
|
|
|
|
|
| Transitional adjustments, other deductions and minority
interests |
(7) |
(7) |
(35) |
(35) |
| Additional Tier 1 capital |
5,291 |
3,428 |
4,746 |
2,401 |
| Tier 1 capital |
18,977 |
17,114 |
18,195 |
15,830 |
| Equity instruments and subordinated borrowings eligible
as Tier 2 capital |
2,983 |
2,983 |
2,668 |
2,668 |
| Ineligible equity instruments and subordinated borrowings |
30 |
|
30 |
|
| Surplus provisions relative to expected losses eligible
under the internal ratings-based
approach and general credit risk adjustments under the standardised approach
|
380 |
380 |
390 |
390 |
| Tier 2 instruments of entities operating mainly in the
insurance sector in which the
institution has a significant investment deducted from Tier 2 capital
|
|
|
|
|
| Transitional adjustments, other deductions and minority
interests |
|
|
26 |
|
| Tier 2 capital |
3,394 |
3,364 |
3,114 |
3,058 |
| Total capital |
22,371 |
20,477 |
21,309 |
18,888 |
| Total risk weighted assets |
118,668 |
118,668 |
112,004 |
112,004 |
| CET 1 ratio |
11.5% |
11.5% |
12.0% |
12.0% |
| Tier 1 ratio |
16.0% |
14.4% |
16.2% |
14.1% |
| Total capital ratio |
18.9% |
17.3% |
19.0% |
16.9% |
(1)
This line is detailed in the table below showing the reconciliation of accounting
and regulatory capital.
(2)
This line includes the transitional adjustment for exceeding the ceiling on CET1 instruments
of entities in the financial sector in which the establishment holds a major stake.
The Common Equity Tier 1 (CET1) capital stood at €13.7 billion at 31 December 2018,
up by €0.3 billion compared with end 2017. The events that affected the CET1 during
2018 concerned the foreign exchange effect for + €0.2 billion, the retained earnings
from 2018 for +€1 billion, the payment in the form of dividends of coupons of AT1
of the group for -€0.2 billion, the drop in reserves on equity securities at fair
value through other comprehensive income that cannot be reclassified for +€0.1 billion,
as well as the impact of the first application of IFRS 9 for -€0.2 billion. The CET1
was also affected by the increase in the deduction pursuant to the prudent valuation
(-€0.3 billion) and that made for exceeding the exemption on for instruments of Crédit
Agricole CIB's financial holdings portfolio, mainly due to the increase in the book
value of the BSF (-€0.1 billion), as well as by the increase in deductions of goodwill
and intangible assets (-€0.1 billion), notably following the acquisition of Banca
Leonardo and lastly deductions of irrevocable payment commitments subscribed when
setting up the deposit guarantee fund (-€0.1 billion).
You will recall that since 1 January 2018, there are no longer transitional arrangements
applied to elements of CET1.
Fully loaded Tier 1 capital amounted to €17.1 billion at 31 December 2018 and was
€1.3 billion higher than that of 31 December 2017, whilst the phased-in amount was
€19 billion, up by €1.1 billion compared with 31 December 2017. This includes the
CET1 capital described above and the Additional Tier 1 (AT1) capital, which underwent
the following changes:
| ― |
the hybrid securities included in Tier 1 capital eligible for
Basel III amounted to
€3.5 billion, up €1 billion over 2018;
|
| ― |
the entire stock prior to 1 January 2014 was ineligible on a
fully loaded basis. Phased-in,
the grandfathering provisions make it possible to maintain an amount of debt corresponding
to a maximum of 40% of the stock at 31 December 2012. The amount of these "grandfathered"
securities decreased mainly due to the foreign exchange impact and the depreciation
of the "grandfathered" stock: at 31 December 2018, the amount of the residual inventory
benefiting from grandfathering was slightly higher than the maximum possible basis,
despite the latter having been reduced;
|
Fully loaded Tier 2 capital, at €3,4 billion, was up by €0,3 billion compared with
31 December 2017;
| ― |
the hybrid securities included in Tier 2 capital eligible for
Basel III amounted to
€3 billion, up €0.3 billion;
|
| ― |
surplus provisions relative to expected losses eligible under
the internal ratings-based
approach and general credit risk adjustments including tax effects under the standardised
approach came to €0.4 billion at 31 June 2018, stable compared with 31 December 2017.
|
In all, fully loaded total capital at 31 December 2018 stood at €20,5 billion,
or
€1,6 billion lower than at 31 December 2017. Phased-in total capital amounted to €22,4
billion, up €1,1 billion compared with 31 December 2017.
3.1.6.5 CHANGES
IN REGULATORY CAPITAL IN 2018
|
|
Phased-in |
| € million |
31.12.2018 vs 31.12.2017 |
| Core Tier 1 Capital at 31.12.2017 |
13,449 |
| Increase in share capital and reserves (including dividend
payment in shares) |
127 |
| Capital repayment (1) |
|
| Income for the year before dividend distribution |
1,479 |
| Expected dividend distribution |
(489) |
| Exceptional dividend distribution |
|
| Advance dividend paid |
|
| Unrealised capital gains and losses on available-for-sale
securities and other unrealised
capital gains and losses
|
(204) |
| Prudent valuation |
(308) |
| Minority interests |
16 |
| Change in goodwill and other intangible assets |
(108) |
| Insufficiency of credit risk adjustments relative to
expected losses using the internal
rating approach deducted CET1
|
(1) |
| Regulatory adjustments (2) |
(275) |
| Tier 1 capital at 31.12.2018 |
13,686 |
| Additional Tier 1 capital at 31.12.2017 |
4,746 |
| Issues |
1,000 |
| Redemptions |
|
| Regulatory adjustments |
(455) |
| Additional Tier 1 capital at 31.12.2018 |
5,291 |
| Tier 1 capital |
18,977 |
| Additional capital at 31.12.2017 |
3,114 |
| Issues and foreign currency impacts on debt stock (2) |
315 |
| Redemptions and foreign currency impacts on debt stock |
|
| Regulatory adjustments including amortisation (3) |
(35) |
| Tier 2 capital at 31.12.2018 |
3,394 |
| Total capital at 31.12.2018 |
22,371 |
(1)
Capital repayment: shareholder advance.
(2)
Change is related to foreign currency impacts
(3)
Tier 2 instruments are subject to a haircut during the 5-year period prior to their
maturity date.
3.1.6.6 RECONCILIATION
OF ACCOUNTING AND REGULATORY CAPITAL
|
|
31.12.2018 |
31.12.2017 |
| € million |
Phased-in |
Fully loaded |
Phased-in |
Fully loaded |
| Equity, Group share (accounting amount) (1) |
20,308 |
20,308 |
18,940 |
18,940 |
| Dividend payable on current year's income |
|
|
(937) |
(937) |
| Advance dividend paid |
|
|
|
|
| Payment of an exceptional dividend |
|
|
(300) |
(300) |
| 2018 net income not taken into account in regulatory
capital |
(489) |
(489) |
|
|
| Unrealised gains/losses on change in own credit risk
on structured filtered products |
71 |
71 |
322 |
322 |
| Unrealised gains/losses on change in own credit risk
on filtered derivatives |
(163) |
(163) |
(235) |
(235) |
| Unrealised gains/losses on filtered cash flow hedges |
|
|
(13) |
|
| Transitional treatment of unrealised gains and losses |
(112) |
(112) |
(75) |
|
| AT1 instruments included in reported shareholders' equity |
(3,435) |
(3,435) |
(2,435) |
(2,435) |
| Other regulatory adjustments |
(15) |
(15) |
|
|
| Shareholders' equity, Group share |
16,165 |
16,165 |
15,267 |
15,355 |
| Reported minority interests (1) |
112 |
112 |
96 |
|
| (-) Preferred shares |
|
|
|
|
| (-) Items not recognised for regulatory purposes |
|
|
|
|
| Minority interests |
|
|
|
|
| Other equity instruments |
|
|
|
|
| Deductions of goodwill and other intangible assets |
(1,327) |
(1,327) |
(1,219) |
(1,219) |
| Deferred tax assets dependent on future profitability
and not arising from temporary
differences
|
(26) |
(26) |
(44) |
(55) |
| Insufficient adjustments for credit risk in relation
to expected loss under the internal
ratings-based approach, deducted from CET1
|
(7) |
(7) |
(6) |
(6) |
| Amount exceeding exemption limit on CET1 instruments
held by financial sector entities
in which the institution owns a significant investment and deductible deferred tax
assets dependent on future profitability and arising from temporary differences
|
(100) |
(100) |
|
|
| (-) Transparent treatment of UCITS |
(9) |
(9) |
(8) |
(8) |
| Advance prudent valuation |
(840) |
(840) |
(532) |
(532) |
| Transitional adjustments on amounts exceeding exemption
limits of CET1 instruments
of financial sector entities
|
|
|
|
|
| Other CET1 items |
(282) |
(282) |
(105) |
(105) |
| Total CET1 |
13,686 |
13,686 |
13,449 |
13,429 |
| AT1 equity instruments (including preferred shares) |
5,298 |
3,435 |
4,781 |
2,435 |
| Tier 1 or Tier 2 instruments of financial sector entities
in which the institution
owns a significant investment deducted from Tier 1
|
|
|
|
|
| Basel III transitional adjustments and deductions |
(7) |
(7) |
(35) |
(35) |
| Other Tier 1 items |
|
|
|
|
| Total Additionnal Tier 1 |
5,291 |
3,428 |
4,746 |
2,401 |
| Total Tier 1 |
18,977 |
17,114 |
18,195 |
15,830 |
| Tier 2 equity instruments |
3,014 |
2,983 |
2,699 |
2,668 |
| Excess provisions relative to expected loss eligible
under internal ratings approach |
380 |
380 |
356 |
356 |
| General credit risk adjustments using the standard approach |
|
|
35 |
35 |
| Tier 2 instruments of entities mainly from the insurance
sector in which the institution
owns a significant investment, deducted from Tier 2
|
|
|
|
|
| Transitional adjustments and deductions |
|
|
26 |
|
| Other Tier 2 items |
|
|
|
|
| Total Tier 2 |
3,394 |
3,364 |
3,114 |
3,058 |
| Ownership interests and investments in insurance companies |
|
|
|
|
| Total capital |
22,371 |
20,477 |
21,309 |
18,888 |
(1)
Information covered by the auditors' opinion.
3.1.7 Other ratios
3.1.7.1 LEVERAGE
RATIO
Article 429 of the CRR specifying the methods for calculating the leverage ratio
was
amended and replaced by the Delegated Act No 2015/62 of 10 October 2014. The delegated
act was published in the OJEU on 18 January 2015.
Publication of the ratio at least once a year is mandatory as of 1 January 2015.
Institutions
can choose to publish a fully loaded ratio, a phased-in ratio or both ratios.
If the institution decides to change its publication choice, at the time of first
publication it must reconcile the data for all of the ratios previously published
with the data for the new ratios selected for publication.
An observation period has been introduced for the leverage ratio running from 1
January
2014 to 1 January 2017 to monitor the components and the behaviour of the ratio relative
to the requirements based on risk.
The implementation under Pillar 1 is delayed, and could be done as part of its
implementation
in CRR2.
A requirement for a two-level leverage ratio is advocated by the Basel Committee:
it could be 3% for non-G-SIBs, and at a level of 3% plus half of the entity's systemic
risk buffer for G-SIBs.
The leverage ratio is defined as the Tier 1 capital divided by the exposure measure,
i.e. balance sheet and off-balance sheet assets after certain restatements of derivatives,
intragroup transactions, securities financing transactions, items deducted from the
numerator, and off-balance-sheet items.
At 31 December 2018, Crédit Agricole CIB's leverage ratio stood at 3.41% on a phased-in
Tier 1 basis.
► Summary of the
reconciliation between accounting assets and exposures for the purposes
of the leverage (LR-SUM T)
| € million |
|
Applicable Amount |
| 1 |
Total assets as per published financial statements |
511,702 |
| 2 |
Adjustment for entities which are consolidated for accounting
purposes but are outside
the scope of regulatory consolidation
|
(7,871) |
| 3 |
(Adjustment for fiduciary assets recognised on the balance
sheet pursuant to the applicable
accounting framework but excluded from the leverage ratio total exposure measure in
accordance with Article 429(13) of Regulation (EU) No 575/2013)
|
|
| 4 |
Adjustments for derivative financial instruments |
(76,757) |
| 5 |
Adjustments for securities financing transactions (SFTs) |
27,628 |
| 6 |
Adjustment for off-balance sheet items (ie conversion
to credit equivalent amounts
of off-balance sheet exposures)
|
118,516 |
| EU-6a |
(Adjustment for intragroup exposures excluded from the
leverage ratio total exposure
measure in accordance with Article 429 (paragraph 7) of Regulation (EU) No 575/2013)
|
(13,513) |
| EU-6b |
(Adjustment for exposures excluded from the leverage
ratio total exposure measure
in accordance with Article 429 (paragraph 14) of Regulation (EU) No 575/2013)
|
|
| 7 |
Other adjustments |
(2,587) |
| 8 |
Leverage ratio total exposure measure |
557,118 |
The qualitative elements (LRQua) required by the Implementing Regulation (EU) 2016/200
dated 15 February 2016 are the following.
♦ Description
of the procedures used to manage the risk of excessive leverage
The leverage ratio is not sensitive to risk factors and, on this basis, it is considered
to be a measurement that supplements the solvency and liquidity risk management system
(solvency ratio/resolution ratio) already limiting the size of the balance sheet.
Within the framework of monitoring excessive leverage, controls at Group level set
limits on the size of the balance sheet for some businesses that use few risk-weighted
assets.
♦ Description
of factors which had an impact on the leverage ratio during the period
to which the leverage ratio reported by the institution relates.
The leverage ratio was impacted by the increase in phased-in equity capital explained
in Section 3.1.6.4 and also by the progression in exposures mainly on the Repos activity
and financing amounts outstanding
► Leverage ratio:
Joint statement (LRCOM-T)
| € million |
|
CRR Leverage ratio exposures |
| On-balance sheet exposures (excluding derivatives and
SFTs) |
|
|
| 1 |
On-balance sheet items (excluding derivatives, SFTs and
fiduciary assets, but including
collateral)
|
278,931 |
| 2 |
(Asset amounts deducted in determining Tier 1 capital) |
(2,587) |
| 3 |
Total on-balance sheet exposures (excluding derivatives,
SFTs and fiduciary assets)
(sum of lines 1 and 2)
|
276,344 |
| Derivative exposures |
|
|
| 4 |
Replacement cost associated with all derivatives transactions
(ie net of eligible
cash variation margin)
|
14,089 |
| 5 |
Add-on amounts for PFE associated with all derivatives
transactions (mark-to-market
method)
|
28,290 |
| EU-5a |
Exposure determined under Original Exposure Method |
|
| 6 |
Gross-up for derivatives collateral provided where deducted
from the balance sheet
assets pursuant to the applicable accounting framework
|
6,133 |
| 7 |
(Deductions of receivables assets for cash variation
margin provided in derivatives
transactions)
|
(19,991) |
| 8 |
(Exempted CCP leg of client-cleared trade exposures) |
|
| 9 |
Adjusted effective notional amount of written credit
derivatives |
12,699 |
| 10 |
(Adjusted effective notional offsets and add-on deductions
for written credit derivatives) |
(8,920) |
| 11 |
Total derivative exposures (sum of lines 4 to 10) |
32,300 |
| SFT exposures |
|
|
| 12 |
Gross SFT assets (with no recognition of netting), after
adjusting for sales accounting
transactions
|
198,071 |
| 13 |
(Netted amounts of cash payables and cash receivables
of gross SFT assets) |
(61,224) |
| 14 |
Counterparty credit risk exposure for SFT assets |
6,624 |
| EU-14a |
Derogation for SFTs: Counterparty credit risk exposure
in accordance with Article
429b (4) and 222 of Regulation (EU) No 575/2013
|
|
| 15 |
Agent transaction exposures |
|
| EU-15a |
(Exempted CCP leg of client-cleared SFT exposure) |
|
| 16 |
Total securities financing transaction exposures (sum
of lines 12 to 15a) |
143,472 |
| Other off-balance sheet exposures |
|
|
| 17 |
Off-balance sheet exposures at gross notional amount |
198,566 |
| 18 |
(Adjustments for conversion to credit equivalent amounts) |
(80,050) |
| 19 |
Other off-balance sheet exposures (sum of lines 17 to
18) |
118,516 |
| Exempted exposures in accordance with Article 429(7)
and (14) of Regulation (EU) No
575/2013 (on and off balance sheet)
|
|
|
| EU-19a |
(Intragroup exposures (solo basis) exempted in accordance
with Article 429(7) of Regulation
(EU) No 575/2013 (on and off balance sheet))
|
(13,513) |
| EU-19b |
(Exposures exempted in accordance with Article 429 (14)
of Regulation (EU) No 575/2013
(on and off balance sheet))
|
|
| Capital and total exposures |
|
|
| 20 |
Tier 1 capital |
18,977 |
| 21 |
Total leverage ratio total exposure measure (sum of lines
3, 11, 16, 19, EU-19a and
EU-19b)
|
557,118 |
| Leverage ratio |
|
|
| 22 |
Leverage ratio |
3.41% |
| Choice on transitional arrangements and amount of derecognised
fiduciary items |
|
|
| EU-23 |
Choice on transitional arrangements for the definition
of the capital measure |
Transitional |
| EU-24 |
Amount of derecognised fiduciary items in accordance
with Article 429(11) of Regulation
(EU) NO 575/2013
|
|
| EU-1 |
Total on-balance sheet exposures (excluding derivatives,
SFTs, and exempted exposures),
of which:
|
269,774 |
| EU-2 |
Trading book exposures |
7,910 |
| EU-3 |
Banking book exposures, of which: |
261,864 |
| EU-4 |
Covered bonds |
|
| EU-5 |
Exposures treated as sovereigns |
72,639 |
| EU-6 |
Exposures to regional governments, MDB, international
organisations and PSE not treated
as sovereigns
|
1,203 |
| EU-7 |
Institutions |
21,852 |
| EU-8 |
Secured by mortgages of immovable properties |
395 |
| EU-9 |
Retail exposures |
13,663 |
| EU-10 |
Corporate |
104,191 |
| EU-11 |
Exposures in default |
3,859 |
| EU-12 |
Other exposures (eg equity, securitisations, and other
non-credit obligation assets) |
44,061 |
Crédit Agricole CIB considers the leverage ratio as an additional measure to the
constraints
that weigh on solvency and liquidity, and that already limit the size of the balance
sheet. As part of the process of monitoring excess leverage, constraints are actively
managed. Crédit Agricole CIB's leverage ratio dropped by 0.25 bps since the beginning
of 2018.
3.1.7.2 RESOLUTION
RATIOS
♦ MREL Ratio
The MREL ratio (Minimum Requirement for own funds and Eligible Liabilities) is
defined
in the European Bank Recovery and Resolution directive (BRRD) published on 12 June
2014 to be applied from 1 January 2015 (except the provisions on the internal bail-in
and the MREL applicable in 2016).
More generally, the BRRD sets out a framework for the resolution of banks throughout
the European Union, aiming to equip the resolving authorities with joint instruments
and powers to prevent banking crises, preserve financial stability and reduce the
exposure of tax-payers to losses.
The MREL ratio corresponds to a minimum requirement for capital and eligible commitments
which must be available in order to absorb losses in the event of resolution. This
minimum requirement is calculated as the amount of equity capital and eligible commitments
expressed as a percentage of the total of liabilities and equity capital of the establishment.
In this calculation, total liabilities takes into account the full recognition of
the compensation rights applicable to derivatives. The following are eligible for
MREL: prudential equity capital, subordinated securities with a residual maturity
of over a year (including those not eligible prudentially and the discounted part
of Tier 2), non-preferred senior debts with a residual maturity of over a year (Crédit
Agricole CIB issued in 2018 $630 million at 5 years ahead of the entry into force
of the MREL requirements and taking into account the growth of the balance sheet)
and certain preferred senior debts with residual maturities of over a year. The preferred
senior debt eligible for MREL is subject to the assessment of the Unique Resolution
Council (CRU).
The MREL ratio serves to calibrate an eligible liabilities requirement and does
not
prejudice debts which would effectively be called on to suffer losses in the case
of resolution.
In the first half of 2018, the Crédit Agricole group was notified by the CRU of
its
MREL requirement, already applicable at the consolidated level and respected by the
Group. This requirement may potentially change when set annually by the CRU, and also
as part of the development of the European regulatory framework. The Crédit Agricole
group is keeping its target of maintaining this ratio above 8%, which in the event
of resolution would enable use of the unique resolution fund (pending the decision
of the resolution authority) before applying the principle of internal bail-in for
preferred senior debts, enabling the creation of an additional layer of protection
for preferred senior investors.
The first MREL decisions at the individual level by the CRU, which will be binding
on Crédit Agricole CIB, are not expected prior to 2019. This objective defined by
the resolution authority may be different from the objective set for the Group.
♦ TLAC Ratio
This ratio, the details of which have been specified in a term sheet published
on
9 November 2015, was drawn up on the request of the G20 by the Financial Stability
Board (FSB). The FSB thus defined the calculation of a ratio aiming to estimate the
appropriateness of the capacities of systemic banks (G-SIBs) to absorb losses and
recapitalise. This new ratio for Total Loss Absorbing Capacity (TLAC), which will
be transposed at the European level in the CRR regulations and will come into force
from 2019, will provide the resolution authorities with the means of assessing whether
the G-SIBs have sufficient capacity to absorb losses, before and during the resolution.
Consequently, the resolution authorities will be able to implement an ordered resolution
strategy, which minimises the impacts on financial stability, guarantees the continuity
of the critical economic functions of the G-SIBs, and limits demands on tax-payers.
According to the TLAC term sheet, included in the legislative proposal of the European
Commission for amendments to the CRR regulation published on 23 November 2016, and
currently being discussed by the European Commission, Parliament and Council, the
minimum level of the TLAC ratio corresponds to twice the minimum prudential demands
(i.e. the maximum between 6% of the lever ratio denominator and 16% of the weighted
risks), and prudential buffers applicable from 1 January 2019 onwards, then the maximum
between 6.75% of the lever ratio denominator and 18% of the weighted risks (then addition
of prudential buffers) from 1 January 2022 onwards. This minimum level can be raised
by the resolution authorities through the MREL requirement (see previous point).
This ratio will apply to the establishments with systemic importance, therefore
to
the Crédit Agricole group. Crédit Agricole CIB, however, is not subject to it, as
it is not classified as a G-SIB by the FSB.
The elements capable of absorbing the losses are share capital, subordinated securities
and debts for which the Resolution Authority can apply internal bail-in.
Once this regulation has been transposed into European law, the Crédit Agricole
group
must respect a minimum TLAC ratio of 19.5% (including a capital conservation buffer
of 2.5% and a G-SIB buffer of 1%) from 1 January 2019 onwards, then of 21.5% from
1 January 2022 onwards. The Crédit Agricole group is aiming to meet these TLAC requirements
without including preferred eligible senior debt, pending changes in risk-weighted
assets. At 31 December 2018, the TLAC to risk-weighted assets ratio is estimated at
21.2% for Crédit Agricole Group, excluding eligible preferred senior debt.
3.2 MANAGEMENT
OF ECONOMIC CAPITAL
3.2.1 Overall
process
For the purpose of having at all times adequate share capital to cover the risks
to
which it is (or may be) exposed, Crédit Agricole CIB supplements the measurement of
regulatory capital requirements (Pillar 1) with the measurement of economic capital
requirements, based on the process of risk identification and a valuation using an
internal approach (Pillar 2).
The assessment of economic capital requirements is one of the elements of the ICAAP
process (Internal Capital Adequacy Assessment Process), which also covers:
| ― |
the programme of stress tests - to introduce a forward-looking
view of the impact
of the scenarios that are more unfavourable to the level of risk and the solvency
of Crédit Agricole CIB;
|
| ― |
as well as controlling the capital requirements through capital
planning, capital
allocation and the control of profitability.
|
The implementation, and also the updating of the ICAAP process, is the responsibility
of each institution.
Economic capital is controlled in accordance with an interpretation of the principal
regulatory requirements:
| ― |
the Basel agreements;
|
| ― |
CRD 4 via its transposition into French regulations by the Decree
of 3 November 2014;
|
| ― |
the European Banking Authority guidelines;
|
| ― |
and the regulatory requirements for ICAAP and ILAAP and the consistent
collection
of information in this respect.
|
Crédit Agricole CIB applies the standards and methods defined by the Crédit Agricole
Group and is careful to ensure that the process for the measurement of economic capital
requirements is subject to appropriate organisation and governance.
3.2.2 Economic
capital requirement
The economic capital requirement quantifies the requirements for capital for each
of the major risks identified in the annual risk identification process.
The process for the identification of major risks aims, during an initial step,
to
record, as comprehensively as is possible, all of the risks likely to impact the balance
sheet, income statement, regulatory ratios or the reputation of a particular entity
or of Crédit Agricole CIB overall and to classify them into categories and sub-categories,
using the same terms as those used for the whole of the Crédit Agricole Group. In
a second step, the objective is to assess the importance of these risks systematically
and comprehensively in order to identify the major risks.
The process of identifying risks combines several sources: an internal analysis
based
on information collected from the risk function and other control functions; and a
supplement through external data. It was approved by the Board of Directors.
For each of the major risks identified, the economic capital requirement is quantified
as follows:
| ― |
the risk measurements already made in Pillar 1 are reviewed and,
where applicable,
supplemented with economic capital requirements;
|
| ― |
the risks absent from Pillar 1 are subject to a specific calculation
for economic
capital requirements, based on internal approaches;
|
| ― |
in general terms, the measurements of economic capital requirements
are made with
a calculation horizon of one year and a quantile (probability of a default occurring),
the level of which is defined on the basis of the Crédit Agricole Group's appetite
for risk in terms of external ratings.
|
Specific governance within Crédit Agricole CIB ensures the consistency of all methodologies
for measuring economic capital requirements.
The measurement of economic capital is supplemented by a latest estimate for the
current
year, consistent with forecast capital requirements at the same date, in such a way
as to take into account the effects of the principal regulatory reforms that can be
foreseen.
All major risks listed during the risk identification process are taken into account
for assessing the economic capital requirement on 31 December 2018. Crédit Agricole
CIB measures in particular: interest rate risk on the banking book, issuer risk, business
risk and strategic risk, credit risk and liquidity price risk.
At 31 December 2018, all economic capital requirements are covered by internal
capital.
In addition to the quantitative aspect, the Group's approach also relies on a qualitative
component supplementing the measurement of economic capital requirements with indicators
of the business lines' exposure to risk and their permanent controls. The qualitative
component meets three objectives:
| ― |
assessment of the risk management and control policy for the
entities within the scope
of deployment according to different areas, this assessment is a part of the risk
identification policy;
|
| ― |
if necessary, the identification and formalisation of areas for
improvement of the
risk control and permanent control system, in a formal action plan per entity;
|
| ― |
identification of any items that have not been correctly analysed
by the quantitative
ICAAP measurements.
|
3.3 NOTES TO REGULATORY
CAPITAL REQUIREMENTS
► Description
of the differences between the scopes of consolidation (entity by entity)
(1)
|
|
Accounting consolidation method |
Regulatory consolidation
method |
|
| Name of entity |
|
Full consolidation |
Proportional integration |
Equity method |
Description of entity |
| UBAF |
MEE |
|
X |
|
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| CAIRS Assurance S.A. |
Overall |
|
|
X |
Financial and insurance activities - insurance |
| Atlantic Asset Securitization LLC |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| LMA SA |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Héphaïstos EUR FCC |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Héphaïstos GBP FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Héphaïstos USD FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Héphaïstos Multidevises FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Eucalyptus FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Pacific USD FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Shark FCC |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Vulcain EUR FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Vulcain Multi-Devises FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Vulcain USD FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Pacific EUR FCC |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Pacific IT FCT |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| Triple P FCC |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| ESNI (compartiment Cédit Agricole CIB) |
Overall |
|
|
X |
Financial and insurance activities - auxiliary activities
in financial services and
insurance
|
| Elipso Finance S.r.l |
MEE |
|
X |
|
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| La Fayette Asset Securitization LLC |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| TSUBAKI ON (FCT) |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| TSUBAKI OFF (FCT) |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
| La Route Avance |
Overall |
|
|
X |
Financial and insurance activities - financial services
activities, except insurance
and pension funds
|
(1)
The scope of consolidation is fully described in note 11 to the consolidated financial
statements.
► Composition
of capital at 31 December 2018
The table below is presented under the format of Annex IV and VI of Commission
Implementing
Regulation No 1423/103 of 20 December 2013. In order to simplify matters, the headings
used below are those of in Annex VI, namely the phased-in headings.
| € million |
|
31.12.2018 |
| Numbering (phased-in) |
|
Phased-in |
Fully loaded |
| Common Equity Tier 1 (CET1) capital: instruments and
reserves |
|
|
|
| 1 |
Capital instruments and the related share premium accounts |
9,425 |
9,425 |
|
|
Of which: Crédit Agricole S.A. shares |
9,425 |
9,425 |
|
|
Of which: Regional Banks' mutual shares (CCI/CCA) |
|
|
|
|
Of which: Local Banks' mutual shares |
|
|
| 2 |
Retained earnings |
|
|
| 3 |
Accumulated other comprehensive income (and other reserves,
to include unrealised
gains and losses under the applicable accounting standards)
|
5,970 |
5,970 |
| 3a |
Fund for general banking risk |
|
|
| 4 |
Amount of qualifying items referred to in Article 484(3)
and the related share premium
accounts subject to phase out from CET1
|
|
|
|
|
Public sector capital injections grandfathered until
1 January 2018 |
|
|
| 5 |
Minority interests (amount allowed in consolidated CET1) |
112 |
112 |
| 5a |
Independently reviewed interim profits net of any foreseeable
charge or dividend |
990 |
990 |
| 6 |
Common Equity Tier 1 (CET1) capital before regulatory
adjustments |
16,496 |
16,496 |
| Common Equity Tier 1 (CET1) capital: regulatory adjustments |
|
|
|
| 7 |
Additional value adjustments (negative amount) |
(840) |
(840) |
| 8 |
Intangible assets (net of related tax liability) (negative
amount) |
(1,327) |
(1,327) |
| 9 |
Empty set in the EU |
|
|
| 10 |
Deferred tax assets that rely on future profitability
excluding those arising from
temporary differences (net of related tax liability where the conditions in Article
38(3) are met) (negative amount)
|
(26) |
(26) |
| 11 |
Fair value reserves related to gains or losses on cash
flow hedges |
(163) |
(163) |
| 12 |
Negative amounts resulting from the calculation of expected
loss amounts |
(7) |
(7) |
| 13 |
Any increase in equity that results from securitised
assets (negative amount) |
(180) |
(180) |
| 14 |
Gains or losses on liabilities valued at fair value resulting
from changes in own
credit standing
|
71 |
71 |
| 15 |
Defined-benefit pension fund assets (negative amount) |
(15) |
(15) |
| 16 |
Direct and indirect holdings by an institution of own
CET1 instruments (negative amount) |
|
|
| 17 |
Holdings of the CET1 instruments of financial sector
entities where those entities
have reciprocal cross with the institution designed to inflate artificially the own
funds of the institution (negative amount)
|
|
|
| 18 |
Direct and indirect holdings by the institution of the
CET1 instruments of financial
sector entities where the institution does not have a significant investment in those
entities (amount above the 10% threshold and net of eligible short positions) (negative
amount)
|
|
|
| 19 |
Direct, indirect and synthetic holdings by the institution
of the CET1 instruments
of financial sector entities where the institution has a significant investment in
those entities (amount above 10% threshold and net of eligible short positions) (negative
amount)
|
(100) |
(100) |
| 20 |
CET1 items or deductions - other |
(103) |
(103) |
| 20a |
Exposure amount of the following items which qualify
for a RW of 1,250%, where the
institution opts for the deduction alternative
|
(9) |
(9) |
| 20b |
Of which: qualifying holdings outside the financial sector
(negative amount) |
(9) |
(9) |
| 20c |
Of which: securitisation positions (negative amount) |
|
|
| 20d |
Of which: free deliveries (negative amount) |
|
|
| 21 |
Deferred tax assets arising from temporary differences
(amount above 10% threshold,
net of related tax liability where the conditions in Article 38(3) are met) (negative
amount)
|
|
|
| 22 |
Amount exceeding the 15% threshold (negative amount) |
|
|
| 23 |
Of which: direct and indirect holdings by the institution
of the CET1 instruments
of financial sector entities where the institution has a significant investment in
those entities
|
|
|
| 24 |
Empty set in the EU |
|
|
| 25 |
Of which: deferred tax assets arising from temporary
differences |
|
|
| 25a |
Losses for the current financial year (negative amount) |
|
|
| 25b |
Foreseeable tax charges relating to CET1 items (negative
amount) |
|
|
| 26 |
Regulatory adjustments applied to Common Equity Tier
1 in respect of amounts subject
to pre-CRR treatment
|
(112) |
(112) |
| 26a |
Regulatory adjustments relating to unrealised gains and
losses pursuant to Articles
467 and 468
|
|
|
|
|
Of which: unrealised gains (phase out) |
|
|
|
|
Of which: unrealised losses (phase out) |
|
|
|
|
Of which: unrealised gains linked to exposures to central
administrations (phase out) |
|
|
|
|
Of which: unrealised losses linked to exposures to central
administrations (phase
out)
|
|
|
| 26b |
Amount to be deducted from or added to Common Equity
Tier 1 capital with regard to
additional filters and deductions required pre CRR
|
(112) |
(112) |
| 27 |
Qualifying AT1 deductions that exceed the AT1 capital
of the institution (negative
amount)
|
|
|
| 28 |
Total regulatory adjustments to Common Equity Tier 1
(CET1) |
(2,811) |
(2,811) |
| 29 |
Common Equity Tier 1 (CET1) capital |
13,686 |
13,686 |
| Additional Tier 1 (AT1) capital: instruments |
|
|
|
| 30 |
Capital instruments and the related share premium accounts |
3,435 |
3,435 |
| 31 |
Of which: classified as equity under applicable accounting
standards |
3,435 |
3,435 |
| 32 |
Of which: classified as liabilities under applicable
accounting standards |
|
|
| 33 |
Amount of qualifying items referred to in Article 484
(4) and the related share premium
accounts subject to phase out from AT1
|
1,863 |
|
|
|
Public sector capital injections grandfathered until
1 January 2018 |
|
|
| 34 |
Qualifying Tier 1 capital included in consolidated AT1
capital (including minority
interests not included in row 5) issued by subsidiaries and held by third parties
|
|
|
| 35 |
Of which: instruments issued by subsidiaries subject
to phase out |
|
|
| 36 |
Additional Tier 1 (AT1) capital before regulatory adjustments |
5,298 |
3,435 |
| Additional Tier 1 (AT1) capital: regulatory adjustments |
|
|
|
| 37 |
Direct and indirect holdings by an institution of own
AT1 instruments (negative amount) |
|
|
| 38 |
Holdings of the AT1 instruments of financial sector entities
where those entities
have reciprocal cross holdings with the institution designed to inflate artificially
the own funds of the institution (negative amount)
|
|
|
| 39 |
Direct and indirect holdings of the AT1 instruments of
financial sector entities where
the institution does not have a significant investment in those entities (amount above
the 10% threshold and net of eligible short positions) (negative amount)
|
|
|
| 40 |
Direct and indirect holdings by the institution of the
AT1 instruments of financial
sector entities where the institution has a significant investment in those entities
(amount above the 10% threshold and net of eligible short positions) (negative amount)
|
|
|
| 41 |
Regulatory adjustments applied to Additional Tier 1 in
respect of amounts subject
to pre-CRR treatment and transitional treatments subject to phase out as prescribed
in Regulation (EU) No 575/2013 (i.e. CRR residual amounts)
|
|
|
| 41a |
Residual amounts deducted from Additional Tier 1 capital
with regard to deduction
from Common Equity Tier 1 capital during the transitional period pursuant to Article
472 of Regulation (EU) No 575/2013
|
|
|
| 41b |
Residual amounts deducted from Additional Tier 1 capital
with regard to deduction
from Tier 2 capital during the transitional period pursuant to Article 475 of Regulation
(EU) No 575/2013
|
|
|
| 41c |
Amount to be deducted from or added to Additional Tier
1 capital with regard to additional
filters and deductions required pre-CRR
|
(7) |
(7) |
| 42 |
Qualifying T2 deductions that exceed the T2 capital of
the institution (negative amount) |
|
|
| 43 |
Total regulatory adjustments to Additional Tier 1 (AT1)
capital |
(7) |
(7) |
| 44 |
Additional Tier 1 capital (AT1) |
5,291 |
3,428 |
| 45 |
Tier 1 capital (T1=CET1 + AT1) |
18,977 |
17,114 |
| Tier 2 (T2) capital: instruments and provisions |
|
|
|
| 46 |
Capital instruments and the related share premium accounts |
2,983 |
2,983 |
| 47 |
Amount of qualifying items referred to in Article 484
(5) and the related share premium
accounts subject to phase out from T2
|
30 |
|
|
|
Public sector capital injections grandfathered until
1 January 2018 |
|
|
| 48 |
Qualifying own funds instruments included in consolidated
T2 capital (including minority
interests and AT1 instruments not included in rows 5 or 34) issued by subsidiaries
and held by third parties
|
|
|
| 49 |
Of which: instruments issued by subsidiaries subject
to phase out |
|
|
| 50 |
Tier 2 (T2) capital before regulatory adjustments |
380 |
380 |
| 51 |
Tier 2 (T2) capital: regulatory adjustments |
3,394 |
3,364 |
| Tier 2 (T2) capital: regulatory adjustments |
|
|
|
| 52 |
Direct and indirect holdings by an institution of own
T2 instruments and subordinated
loans (negative amount)
|
|
|
| 53 |
Holdings of the T2 instruments and subordinated loans
of financial sector entities
where those entities have reciprocal cross holdings with the institution designed
to inflate artificially the own funds of the institution (negative amount)
|
|
|
| 54 |
Direct and indirect holdings of the T2 instruments and
subordinated loans of financial
sector entities where the institution does not have a significant investment in those
entities (amount above the 10% threshold and net of eligible short positions) (negative
amount)
|
|
|
| 54a |
Of which new holdings not subject to transitional arrangements |
|
|
| 54b |
Of which holdings existing before 1 January 2013 and
subject to transitional arrangements |
|
|
| 55 |
Direct and indirect holdings by the institution of the
T2 instruments and subordinated
loans of financial sector entities where the institution has a significant investment
in those entities (net of eligible short positions) (negative amount)
|
|
|
| 56 |
Regulatory adjustments applied to Tier 2 in respect of
amounts subject to pre-CRR
treatment and transitional treatments subject to phase out as prescribed in Regulation
(EU) No 575/2013 (i.e. CRR residual amounts)
|
|
|
| 56a |
Residual amounts deducted from Tier 2 capital with regard
to deduction from Common
Equity Tier 1 capital during the transitional period pursuant to Article 472 of Regulation
(EU) No 575/2013
|
|
|
| 56b |
Residual amounts deducted from Tier 2 capital with regard
to deduction from Additional
Tier 1 capital during the transitional period pursuant to Article 475 of Regulation
(EU) No 575/2013
|
|
|
| 56c |
Amount to be deducted from or added to Tier 2 capital
with regard to additional filters
and deductions required pre-CRR
|
|
|
| 57 |
Total regulatory adjustments to Tier 2 (T2) capital |
|
|
| 58 |
Tier 2 (T2) capital |
3,394 |
3,364 |
| 59 |
Total capital (TC=T1 + T2) |
22,371 |
20,477 |
| 59a |
Risk weighted assets in respect of amounts subject to
pre-CRR treatment and transitional
treatments subject to phase out as prescribed in Regulation (EU) No 575/2013 (i.e.
CRR residual amounts)
|
4,307 |
|
|
|
Of which: CET1 instruments of financial sector entities
not deducted from CET1 (Regulation
[EU] No 575/2013 residual amounts)
|
3,446 |
|
|
|
Of which: Deferred tax assets that rely on future profitability
and arising from temporary
differences not deducted from CET1 (Regulation [EU] No 575/2013 residual amounts)
|
861 |
|
|
|
Of which: AT1 instruments of financial sector entities
not deducted from AT1 (Regulation
[EU] No 575/2013 residual amounts)
|
|
|
|
|
Of which: Tier 2 instruments of financial sector entities
not deducted from Tier 2
(Regulation [EU] No 575/2013 residual amounts)
|
|
|
| 60 |
Total risk weighted assets |
118,668 |
118,668 |
| Capital ratios and buffers |
|
|
|
| 61 |
Common Equity Tier 1 (as a percentage of risk exposure
amount) |
11.53% |
11.53% |
| 62 |
Tier 1 (as a percentage of risk exposure amount) |
15.99% |
14.42% |
| 63 |
Total capital (as a percentage of risk exposure amount) |
18.85% |
17.26% |
| 64 |
Institution specific buffer requirement (CET1 requirement
in accordance with Article
92 (a) plus capital conservation and countercyclical buffer requirements, plus systemic
buffer, plus the systemically important institution buffer (G-SII or O-SII buffer),
expressed as a percentage of risk exposure amount)
|
|
|
| 65 |
Of which: capital conservation buffer requirement |
|
|
| 66 |
Of which: countercyclical buffer requirement |
|
|
| 67 |
Of which: systemic risk buffer requirement |
|
|
| 67a |
Of which: Global Systemically Important Institution (G-SII)
or Other Systemically
Important Institution (O-SII) buffer
|
|
|
| 68 |
Common Equity Tier 1 available to meet buffers (as a
percentage of risk exposure amount) |
|
|
| 69 |
[non relevant in EU regulation] |
|
|
| 70 |
[non relevant in EU regulation] |
|
|
| 71 |
[non relevant in EU regulation] |
|
|
| Amounts below the thresholds for deduction (before risk
weighting) |
|
|
|
| 72 |
Direct and indirect holdings of the capital of financial
sector entities where the
institution does not have a significant investment in those entities (amount below
10% threshold and net of eligible short positions)
|
367 |
367 |
| 73 |
Direct and indirect holdings by the institution of the
CET1 instruments of financial
sector entities where the institution has a significant investment in those entities
(amount below 10% threshold and net of eligible short positions)
|
1,379 |
1,379 |
| 74 |
Empty set in the EU |
|
|
| 75 |
Deferred tax assets arising from temporary differences
(amount below 10% threshold,
net of related tax liability where the conditions in Article 38 are met)
|
344 |
344 |
| Amounts below the thresholds for deduction (before risk
weighting) |
|
|
|
| 76 |
Credit risk adjustments included in Tier 2 in respect
of exposures subject to standardized
approach (prior to the application of the cap)
|
|
|
| 77 |
Cap on inclusion of credit risk adjustments in T2 under
standardized approach |
380 |
380 |
| 78 |
Credit risk adjustments included in Tier 2 in respect
of exposures subject to internal
ratings-based approach (prior to the application of the cap)
|
344 |
344 |
| 79 |
Cap for inclusion of credit risk adjustments in T2 under
internal ratings-based approach |
380 |
380 |
| Applicable caps on the inclusion of provisions in Tier
2 |
|
|
|
| 80 |
Current cap on CET1 instruments subject to phase out
arrangements |
|
|
| 81 |
Amount excluded from CET1 due to cap (excess over cap
after redemptions and maturities) |
|
|
| 82 |
Current cap on AT1 instruments subject to phase out arrangements |
1,876 |
|
| 83 |
Amount excluded from AT1 due to cap (excess over cap
after redemptions and maturities) |
|
|
| 84 |
Current cap on T2 instruments subject to phase out arrangements |
315 |
|
| 85 |
Amount excluded from T2 due to cap (excess over cap after
redemptions and maturities) |
|
|
3.4 COMPOSITION
AND CHANGES IN RISK-WEIGHTED ASSETS
3.4.1 Capital
requirements by type of risk
3.4.1.1 OVERVIEW
OF RISK-WEIGHTED ASSETS (RWA) BY TYPE OF RISK (OV1)
Credit risk, market risk and operational risk-weighted assets amounted to €118.7
billion
as of 31 December 2018 compared to €112.0 billion at 31 December 2017.
|
|
RWA |
Minimal capital requirements |
| € million |
31.12.2018 |
31.12.2017 |
31.12.2018 |
| 1 Credit risk (excluding counterparty credit risk) (CCR) |
64,290 |
59,914 |
5,143 |
| 2 of which standardised approach (SA) |
10,598 |
8,800 |
848 |
| 3 of which the foundation IRB (FIRB) approach |
|
|
|
| 4 of which the advance IRB (AIRB) approach |
52,607 |
50,141 |
4,209 |
| 5 of which Equity IRB under the Simple risk- weight or
the internal models approach |
1,068 |
956 |
85 |
| of which Other non credit obligation assets |
17 |
17 |
1 |
| 6 Counterparty credit risk |
15,391 |
12,859 |
1,231 |
| 7 of which Marked to market |
3,671 |
2,309 |
294 |
| 8 of which original exposure |
|
|
|
| 9 of which standardised approach for counterparty credit
risk |
|
|
|
| 10 of which internal model method (IMM) |
8,363 |
8,039 |
669 |
| 11 of which: Risk exposure amount for contributions to
the default fund of a CCP |
229 |
249 |
18 |
| 12 of which: CVA |
3,128 |
2,262 |
250 |
| 13 Settlement risk |
7 |
1 |
1 |
| 14 Securitisation exposures in banking book (after cap) |
6,393 |
6,056 |
511 |
| 15 of which IRB ratings-based approach (RBA) |
946 |
1,552 |
76 |
| 16 of which IRB Supervisory Formula Approach (SFA) |
1,151 |
634 |
92 |
| 17 of which Internal assessment approach (IAA) |
2,857 |
2,684 |
228 |
| 18 of which Standardised approach (SA) |
1,439 |
1,186 |
115 |
| 19 Market risk |
7,768 |
10,875 |
621 |
| 20 of which standardised approach (SA) |
1,346 |
5,145 |
108 |
| 21 of which internal model approaches (IM) |
6,421 |
5,730 |
514 |
| 22 Large exposures |
|
|
|
| 23 Operational risk |
21,376 |
19,046 |
1,710 |
| 24 of which Basic Indicator Approach |
|
|
|
| 25 of which Standardised Approach |
391 |
184 |
31 |
| 26 of which Advanced Measurement Approach |
20,985 |
18,862 |
1,679 |
|
27Amounts below the thresholds for deduction (subject to 250% risk weight)
|
3,444 |
3,253 |
276 |
| 28 Floor adjustment |
|
|
|
| 29 Total |
118,668 |
112,004 |
9,493 |
3.4.1.2 CHANGES
IN RISK-WEIGHTED ASSETS
The table below shows Crédit Agricole CIB's Group RWA change over 2018.
| € million |
31.12.2017 |
Currency effect |
Organic change |
2018 total change |
31.12.2018 |
| Credit risk |
82,083 |
1,400 |
6,041 |
7,441 |
89,524 |
| Of which CVA |
2,262 |
|
866 |
866 |
3,128 |
| Market risk |
10,875 |
|
(3,107) |
(3,107) |
7,768 |
| Operational risk |
19,046 |
|
2,330 |
2,330 |
21,376 |
| Total |
112,004 |
1,400 |
5,264 |
6,664 |
118,668 |
Risk-weighted assets stand at €118.7 billion, increasing by €6.7 billion over 2018.
This change is essentially explained by:
| ― |
the appreciation of the USD against the EUR in the amount of
€1.4 billion;
|
| ― |
an organic change of +€5.3 billion, resulting mainly from:
| ― |
an increase in organic credit and counterparty risk excluding
CVA (+€6.1 billion)
|
| ― |
lower market risk (-€3.1 billion);
|
| ― |
an increase in operational risk (+€2.3 billion) in anticipation
of Basel IV on operational
non-financial risks: mandatory standard method.
|
|
3.4.2 Credit and
counterparty risk
Definitions:
| ― |
probability of default (PD): the probability that a counterparty
will default within
a period of one year;
|
| ― |
loss given default (LGD): the ratio between the loss incurred
upon counterparty default
and the amount of the exposure at the time of default;
|
| ― |
gross exposures: the amount of exposure (on- and off-balance
sheet) before the use
of credit risk mitigation techniques and before the use of the credit conversion factor
(CCF);
|
| ― |
exposures given default (EGD): the amount of exposure (on- and
off-balance sheet)
after the use of credit risk mitigation techniques and after the use of the credit
conversion factor (CCF);
|
| ― |
credit conversion factor (CCF): ratio reflecting, at the time
of default, the percentage
of the outstanding not drawn down one year before the default;
|
| ― |
risk-weighted assets (RWA): exposure at default (EAD) after application
of a weighting
coefficient;
|
| ― |
valuation adjustments: impairment losses on a specific asset
due to credit risk, recognised
either through a partial write-down or a deduction from the carrying amount of the
asset;
|
| ― |
external credit ratings: credit ratings established by an external
credit rating agency
recognised by the ECB.
|
In part I, a general view is presented of the evolution of credit and counterparty
risk, followed by a more detailed examination of the credit risk in part II, by type
of prudential method: according to the standard method and the IRB method. Counterparty
risk is dealt with in part III, followed by part IV devoted to techniques for reducing
credit and counterparty risk.
3.4.2.1 GENERAL
PRESENTATION OF CREDIT AND COUNTERPARTY RISK
♦ 3.4.2.1.1 Exposure
by type of risk
The table below presents the exposure of the Crédit Agricole CIB Group to overall
risk (credit, counterparty, dilution and settlement/delivery) by category of exposure,
for the standard approaches and internal ratings at 31 December 2018 and at 31 December
2017.
The standard 17 exposure categories are grouped in order to ensure a consistent
presentation
with the IRB exposures.
► Gross exposure,
exposure at default (EAD) to total risk (credit, counterparty, dilution,
settlement) at 31 December 2018
|
|
31.12.2018 |
|
|
Standardsed |
IRB |
| € billion |
Gross exposure(1) |
Gross exposure afrer CRM(2) |
EAD |
RWA |
Gross exposure(1) |
Gross exposure afrer CRM(2) |
| Central governments or central banks |
1,160 |
1,160 |
1,111 |
915 |
83,286 |
93,141 |
| Institutions |
19,296 |
36,758 |
36,332 |
1,525 |
67,354 |
70,224 |
| Corporates |
27,428 |
9,855 |
6,196 |
5,360 |
249,154 |
227,727 |
| Retail customers |
838 |
838 |
794 |
612 |
13,087 |
13,087 |
| Loans to individuals |
838 |
838 |
794 |
612 |
12,964 |
12,964 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w revolving |
|
|
|
|
|
|
| o/w other |
838 |
838 |
794 |
612 |
12,964 |
12,964 |
| Loans to small and medium businesses |
|
|
|
|
122 |
122 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w other |
|
|
|
|
122 |
122 |
| Shares |
206 |
|
206 |
207 |
1,668 |
|
| Securitisations |
2,008 |
|
2,008 |
1,439 |
43,299 |
|
| Assets other than credit obligation |
3,321 |
|
3,321 |
3,127 |
17 |
|
| Total |
54,256 |
48,611 |
49,968 |
13,186 |
457,864 |
404,179 |
|
|
31.12.2018 |
|
|
IRB |
Total |
| € billion |
EAD |
RWA |
Gross exposure(1) |
Gross exposure after CRM(2) |
EAD |
RWA |
| Central governments or central banks |
90,656 |
853 |
84,446 |
94,301 |
91,767 |
1,768 |
| Institutions |
66,176 |
6,768 |
86,650 |
106,982 |
102,507 |
8,293 |
| Corporates |
176,311 |
55,354 |
276,582 |
237,582 |
182,507 |
60,714 |
| Retail customers |
13,086 |
517 |
13,925 |
13,925 |
13,881 |
1,130 |
| Loans to individuals |
12,964 |
508 |
13,803 |
13,803 |
13,759 |
1,120 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w revolving |
|
|
|
|
|
|
| o/w other |
12,964 |
508 |
13,803 |
13,803 |
13,759 |
1,120 |
| Loans to small and medium businesses |
122 |
9 |
122 |
122 |
122 |
9 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w other |
122 |
9 |
122 |
122 |
122 |
9 |
| Shares |
1,668 |
4,512 |
1,874 |
|
1,874 |
4,719 |
| Securitisations |
43,299 |
4,954 |
45,307 |
|
45,307 |
6,393 |
| Assets other than credit obligation |
17 |
17 |
3,337 |
|
3,337 |
3,144 |
| Total |
391,211 |
72,975 |
512,120 |
452,790 |
441,180 |
86,161 |
|
|
31.12.2018 |
| € billion |
Capital requirement |
| Central governments or central banks |
141 |
| Institutions |
663 |
| Corporates |
4,857 |
| Retail customers |
90 |
| Loans to individuals |
90 |
| o/w secured by real estate assets |
|
| o/w revolving |
|
| o/w other |
90 |
| Loans to small and medium businesses |
1 |
| o/w secured by real estate assets |
|
| o/w other |
1 |
| Shares |
378 |
| Securitisations |
511 |
| Assets other than credit obligation |
251 |
| Total |
6,893 |
(1)
Initial gross exposure.
(2)
Gross exposure after credit risk mitigation (CRM).
► Gross exposure,
exposure at default (EAD) to total risk (credit, counterparty, dilution,
settlement) at 31 December 2017
|
|
31.12.2017 |
|
|
Standardised |
IRB |
| € billion |
Gross exposure(1) |
Gross exposure after CRM(2) |
EAD |
RWA |
Gross exposure(1) |
Gross exposure after CRM(2) |
| Central governments or central banks |
1,018 |
1,018 |
985 |
573 |
67,664 |
74,960 |
| Institutions |
17,417 |
31,248 |
30,787 |
1,141 |
72,285 |
77,089 |
| Corporates |
22,522 |
8,572 |
4,985 |
4,273 |
229,504 |
212,752 |
| Retail customers |
828 |
828 |
827 |
647 |
12,481 |
12,483 |
| Loans to individuals |
828 |
828 |
827 |
647 |
12,361 |
12,361 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w revolving |
|
|
|
|
|
|
| o/w other |
828 |
828 |
827 |
647 |
12,361 |
12,361 |
| Loans to small and medium businesses |
|
|
|
|
122 |
122 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w other |
|
|
|
|
122 |
122 |
| Shares |
182 |
|
155 |
164 |
1,677 |
|
| Securitisations |
1,616 |
|
1,616 |
1,186 |
38,497 |
|
| Assets other than credit obligation |
2,903 |
|
2,903 |
2,758 |
17 |
|
| Total |
46,486 |
41,667 |
42,257 |
10,742 |
422,126 |
377,284 |
|
|
31.12.2017 |
|
|
IRB |
Total |
| € billion |
EAD |
RWA |
Gross exposure(1) |
Gross exposure after CRM(2) |
EAD |
RWA |
| Central governments or central banks |
72,975 |
968 |
68,682 |
75,978 |
73,960 |
1,541 |
| Institutions |
73,339 |
6,274 |
89,702 |
108,338 |
104,126 |
7,415 |
| Corporates |
157,643 |
52,051 |
252,027 |
221,324 |
162,629 |
56,323 |
| Retail customers |
12,483 |
441 |
13,309 |
13,311 |
13,310 |
1,089 |
| Loans to individuals |
12,361 |
434 |
13,189 |
13,189 |
13,188 |
1,082 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w revolving |
|
|
|
|
|
|
| o/w other |
12,361 |
434 |
13,189 |
13,189 |
13,188 |
1,082 |
| Loans to small and medium businesses |
122 |
7 |
122 |
122 |
122 |
7 |
| o/w secured by real estate assets |
|
|
|
|
|
|
| o/w other |
122 |
7 |
122 |
122 |
122 |
7 |
| Shares |
1,563 |
4,209 |
1,859 |
|
1,717 |
4,373 |
| Securitisations |
38,475 |
4,870 |
40,113 |
|
40,091 |
6,056 |
| Assets other than credit obligation |
17 |
17 |
2,920 |
|
2,919 |
2,775 |
| Total |
356,494 |
68,829 |
468,612 |
418,951 |
398,752 |
79,571 |
|
|
31.12.2017 |
| € billion |
Capital requirement |
| Central governments or central banks |
123 |
| Institutions |
593 |
| Corporates |
4,506 |
| Retail customers |
87 |
| Loans to individuals |
87 |
| o/w secured by real estate assets |
|
| o/w revolving |
|
| o/w other |
87 |
| Loans to small and medium businesses |
1 |
| o/w secured by real estate assets |
|
| o/w other |
1 |
| Shares |
350 |
| Securitisations |
484 |
| Assets other than credit obligation |
222 |
| Total |
6,366 |
(1)
Initial gross exposure.
(2)
Gross exposure after credit risk mitigation (CRM).
► Settlement/delivery
risk in the trading book
As settlement/delivery risk for the trading book has become insignificant, the
table
is no longer presented.
► Total net amount
and average exposure (CRB-B)
|
|
31.12.2018 |
31.12.2017 |
| € million |
Net value of exposures at the end
of the period(1) |
Average net exposures over the
period |
Net value of exposures at the end
of the period |
Average net exposures over the
period(2) |
| 1 Central governments or central banks |
83,261 |
75,919 |
67,620 |
64,772 |
| 2 Institutions |
66,954 |
69,036 |
71,896 |
65,413 |
| 3 Corporates |
246,592 |
238,740 |
226,483 |
224,609 |
| 4 Of which: Specialised lending |
58,212 |
56,505 |
56,032 |
57,937 |
| 5 Of which: SMEs |
880 |
669 |
583 |
785 |
| 6 Retail |
13,069 |
12,835 |
12,468 |
10,201 |
| 7 Secured by real estate property |
|
|
|
|
| 8 SMEs |
|
|
|
|
| 9 Non-SMEs |
|
|
|
|
| 10 Qualifying revolving |
|
|
|
|
| 11 Other retail |
13,069 |
12,835 |
12,468 |
10,201 |
| 12 SMEs |
122 |
124 |
120 |
79 |
| 13 Non-SMEs |
12,948 |
12,711 |
12,348 |
10,123 |
| 14 Equity |
290 |
295 |
262 |
353 |
| 15 Total IRB approach |
410,167 |
396,825 |
378,728 |
365,347 |
| 16 Central governments or central banks |
1,112 |
1,096 |
972 |
1,265 |
| 17 Regional governments or local authorities |
44 |
43 |
42 |
10 |
| 18 Public sector entities |
1 |
1 |
1 |
1 |
| 19 Multilateral development banks |
6 |
7 |
4 |
5 |
| 20 International organisations |
|
|
|
|
| 21 Institutions |
19,288 |
20,027 |
17,413 |
21,401 |
| 22 Corporates |
26,615 |
23,509 |
21,970 |
22,070 |
| 23 Of which: SMEs |
281 |
300 |
316 |
347 |
| 24 Retail |
817 |
736 |
792 |
814 |
| 25 Of which: SMEs |
|
|
|
|
| 26 Secured by mortgages on immovable property |
211 |
209 |
179 |
240 |
| 27 Of which: SMEs |
16 |
17 |
23 |
27 |
| 28 Exposures in default |
477 |
368 |
253 |
247 |
| 29 Items associated with particularly high risk |
|
|
|
|
| 30 Covered bonds |
|
|
|
|
| 31 Claims on institutions and corporates with a short-term
credit assessment |
|
|
|
|
| 32 Collective investments undertakings |
46 |
46 |
44 |
51 |
| 33 Equity exposures |
206 |
194 |
155 |
155 |
| 34 Other exposures |
3 321 |
3 384 |
2 903 |
2 802 |
| 35 Standardised |
52,144 |
49,619 |
44,727 |
49,062 |
| 36 Total |
462,311 |
446,444 |
423,456 |
414,409 |
(1)
The 2018 average is calculated on the basis of data recorded at the end of each quarter
2018.
(2)
The 2017 average is calculated on the basis of data recorded at the end of each quarter
2017.
The total net exposure amounted to €462.3 billion at 31 December 2018, of which
89%
is subject to a prudential treatment based on internal ratings.
♦ 3.4.2.1.2 Exposures
by geographic area
The breakdown is done on the total amount of exposures per geographical zone on
the
scope of the Crédit Agricole CIB group excluding securitisation transactions and "Assets
other than credit obligations".
At 31 December 2018, this amount was €462 billion (€423 billion at 31 December
2017
for the same scope).
► At 31 December
2018
► At 31 December
2017
► Geographic breakdown
of exposures (CRB-C)
|
|
31.12.2018 |
|
|
EUROPE |
| € million |
France |
United-Kingdom |
Germany |
Luxembourg |
Switzerland |
Italy |
| 1 Central governments or central banks |
20,109 |
3,344 |
1,823 |
2,118 |
1,257 |
159 |
| 2 Institutions |
31,702 |
4,747 |
1,096 |
1,269 |
5,203 |
1,261 |
| 3 Corporates |
54,644 |
18,065 |
12,094 |
10,699 |
6,383 |
10,944 |
| 4 Retail |
2,210 |
275 |
22 |
1,025 |
1,009 |
363 |
| 5 Equity |
145 |
13 |
|
27 |
32 |
1 |
| 6 Total IRB approach 31.12.2018 |
108,810 |
26,444 |
15,035 |
15,138 |
13,883 |
12,729 |
| Total IRB approach 31.12.2017 |
123,186 |
23,871 |
17,233 |
12,595 |
11,216 |
10,273 |
| 7 Central governments or central banks |
463 |
15 |
10 |
1 |
41 |
213 |
| 8 Regional governments or local authorities |
|
|
|
|
|
|
| 9 Public sector entities |
|
|
|
|
|
|
| 10 Multilateral development banks |
|
|
|
|
|
|
| 11 International organisations |
|
|
|
|
|
|
| 12 Institutions |
7,456 |
8,128 |
410 |
0 |
26 |
179 |
| 13 Corporates |
22,833 |
387 |
11 |
40 |
151 |
104 |
| 14 Retail |
1 |
|
|
|
1 |
294 |
| 15 Secured by mortgages on immovable property |
14 |
|
|
|
|
64 |
| 16 Exposures in default |
412 |
6 |
|
|
|
39 |
| 17 Items associated with particularly high risk |
|
|
|
|
|
|
| 18 Covered bonds |
|
|
|
|
|
|
| 19 Claims on institutions and corporates with a short-term
credit assessment |
|
|
|
|
|
|
| 20 Collective investments undertakings |
46 |
|
|
|
|
|
| 21 Equity exposures |
191 |
|
|
|
|
14 |
| 22 Other exposures |
2,413 |
31 |
1 |
35 |
385 |
32 |
| 23 Total standardised approach 31.12.2018 |
33,831 |
8,567 |
432 |
76 |
604 |
939 |
| Total standardised approach 31.12.2017 |
27,088 |
9,201 |
589 |
40 |
611 |
246 |
| 24 Total 31.12.2018 |
142,641 |
35,011 |
15,467 |
15,213 |
14,487 |
13,668 |
| Total 31.12.2017 |
150,274 |
33,071 |
17,822 |
12,634 |
11,827 |
10,520 |
|
|
31.12.2018 |
|
|
EUROPE |
ASIA AND OCEANIA |
| € million |
Netherlands |
Spain |
Ireland |
Others |
Japan |
Singapore |
| 1 Central governments or central banks |
40 |
627 |
1,337 |
6,227 |
29,477 |
1,339 |
| 2 Institutions |
1,808 |
651 |
557 |
2,328 |
1,368 |
220 |
| 3 Corporates |
5,796 |
5,113 |
3,150 |
17,378 |
7,470 |
6,109 |
| 4 Retail |
17 |
347 |
|
3,468 |
137 |
1,339 |
| 5 Equity |
|
25 |
|
20 |
5 |
|
| 6 Total IRB approach 31.12.2018 |
7,662 |
6,763 |
5,045 |
29,420 |
38,457 |
9,007 |
| Total IRB approach 31.12.2017 |
7,599 |
7,023 |
4,948 |
24,638 |
22,481 |
9,073 |
| 7 Central governments or central banks |
4 |
17 |
|
6 |
55 |
5 |
| 8 Regional governments or local authorities |
|
|
|
|
|
|
| 9 Public sector entities |
|
|
|
|
|
|
| 10 Multilateral development banks |
|
|
|
|
|
|
| 11 International organisations |
|
|
|
|
|
|
| 12 Institutions |
25 |
30 |
|
36 |
565 |
22 |
| 13 Corporates |
20 |
239 |
0 |
213 |
20 |
389 |
| 14 Retail |
|
1 |
|
2 |
|
0 |
| 15 Secured by mortgages on immovable property |
|
46 |
|
12 |
|
|
| 16 Exposures in default |
|
2 |
0 |
|
|
0 |
| 17 Items associated with particularly high risk |
|
|
|
|
|
|
| 18 Covered bonds |
|
|
|
|
|
|
| 19 Claims on institutions and corporates with a short-term
credit assessment |
|
|
|
|
|
|
| 20 Collective investments undertakings |
|
|
|
|
|
|
| 21 Equity exposures |
|
|
|
0 |
|
|
| 22 Other exposures |
|
38 |
|
52 |
3 |
7 |
| 23 Total standardised approach 31.12.2018 |
50 |
373 |
0 |
321 |
644 |
423 |
| Total standardised approach 31.12.2017 |
51 |
399 |
0 |
356 |
648 |
158 |
| 24 Total 31.12.2018 |
7,712 |
7,136 |
5,045 |
29,741 |
39,101 |
9,431 |
| Total 31.12.2017 |
7,650 |
7,422 |
4,948 |
24,994 |
23,128 |
9,231 |
|
|
31.12.2018 |
|
|
ASIA AND OCEANIA |
NORTH AMERICA |
| € million |
South Korea |
Honk-kong |
China |
Others |
United-states |
Others |
| 1 Central governments or central banks |
552 |
1,030 |
859 |
2,012 |
6,827 |
1,113 |
| 2 Institutions |
1,133 |
845 |
2,187 |
2,474 |
2,402 |
304 |
| 3 Corporates |
5,089 |
3,572 |
1,751 |
10,918 |
46,923 |
3,533 |
| 4 Retail |
0 |
845 |
241 |
809 |
11 |
36 |
| 5 Equity |
|
3 |
|
2 |
18 |
|
| 6 Total IRB approach 31.12.2018 |
6,775 |
6,295 |
5,038 |
16,215 |
56,180 |
4,986 |
| Total IRB approach 31.12.2017 |
6,112 |
5,540 |
5,184 |
15,963 |
44,499 |
4,623 |
| 7 Central governments or central banks |
28 |
6 |
5 |
41 |
130 |
|
| 8 Regional governments or local authorities |
|
|
|
|
|
44 |
| 9 Public sector entities |
1 |
|
|
|
|
|
| 10 Multilateral development banks |
|
|
|
|
|
|
| 11 International organisations |
|
|
|
|
|
|
| 12 Institutions |
101 |
70 |
7 |
259 |
1,259 |
3 |
| 13 Corporates |
187 |
490 |
1 |
14 |
540 |
414 |
| 14 Retail |
|
|
|
|
3 |
15 |
| 15 Secured by mortgages on immovable property |
|
37 |
|
|
38 |
|
| 16 Exposures in default |
|
9 |
|
|
0 |
|
| 17 Items associated with particularly high risk |
|
|
|
|
|
|
| 18 Covered bonds |
|
|
|
|
|
|
| 19 Claims on institutions and corporates with a short-term
credit assessment |
|
|
|
|
|
|
| 20 Collective investments undertakings |
|
|
|
|
|
|
| 21 Equity exposures |
|
|
|
|
1 |
|
| 22 Other exposures |
8 |
10 |
2 |
11 |
269 |
0 |
| 23 Total standardised approach 31.12.2018 |
324 |
622 |
15 |
325 |
2,239 |
475 |
| Total standardised approach 31.12.2017 |
183 |
440 |
19 |
359 |
2,195 |
179 |
| 24 Total 31.12.2018 |
7,099 |
6,917 |
5,052 |
16,540 |
58,420 |
5,462 |
| Total 31.12.2017 |
6,295 |
5,980 |
5,203 |
16,322 |
46,694 |
4,803 |
|
|
31.12.2018 |
|
|
CENTRAL AND SOUTH AMERICA |
AFRICA AND MIDDLE EAST |
TOTAL |
| € million |
|
|
|
| 1 Central governments or central banks |
70 |
2,941 |
83,262 |
| 2 Institutions |
562 |
4,836 |
66,953 |
| 3 Corporates |
10,327 |
6,635 |
246,592 |
| 4 Retail |
214 |
700 |
13,069 |
| 5 Equity |
|
|
290 |
| 6 Total IRB approach 31.12.2018 |
11,173 |
15,112 |
410,167 |
| Total IRB approach 31.12.2017 |
10,418 |
12,248 |
378,724 |
| 7 Central governments or central banks |
4 |
69 |
1,112 |
| 8 Regional governments or local authorities |
|
|
44 |
| 9 Public sector entities |
|
|
1 |
| 10 Multilateral development banks |
|
6 |
6 |
| 11 International organisations |
|
|
|
| 12 Institutions |
164 |
546 |
19,288 |
| 13 Corporates |
514 |
50 |
26,615 |
| 14 Retail |
500 |
1 |
817 |
| 15 Secured by mortgages on immovable property |
|
|
211 |
| 16 Exposures in default |
2 |
7 |
477 |
| 17 Items associated with particularly high risk |
|
|
|
| 18 Covered bonds |
|
|
|
| 19 Claims on institutions and corporates with a short-term
credit assessment |
|
|
|
| 20 Collective investments undertakings |
|
|
46 |
| 21 Equity exposures |
|
|
206 |
| 22 Other exposures |
19 |
3 |
3,321 |
| 23 Total standardised approach 31.12.2018 |
1,203 |
682 |
52,144 |
| Total standardised approach 31.12.2017 |
1,413 |
555 |
44,732 |
| 24 Total 31.12.2018 |
12,376 |
15,794 |
462,311 |
| Total 31.12.2017 |
11,832 |
12,804 |
423,456 |
The portfolio has significant geographic diversification. Almost 38% of exposure
is
outside Europe, mainly in North America and Asia.
♦ 3.4.2.1.3 Exposure
by business sector
The total amount of exposures of the Crédit Agricole CIB group is broken down per
sector of activity excluding securitisation transactions and adjustments that are
not directly assignable to an activity sector.
At 31 December 2018, this amount was €409 billion (€381 billion at 31 December
2017
for the same scope).
► Breakdown of
exposures by business sector - Overall scope
A breakdown of the loan portfolio by economic business sector offers a good level
of risk diversification, resulting from the risk management strategy set by the Group.
► Breakdown of
exposures by business sector - Corporates portfolio
The Corporate portfolio also offers a satisfactory level of diversification: in
this
scope, none of the sectors represent more than 13% of total exposures at the end of
2018.
♦ 3.4.2.1.4 Breakdown
of exposures by residual maturity
The breakdown of exposures by residual maturity and financial instruments is available
on an accounting basis in Note 3.3 "Liquidity and financing risk" of the Notes to
the consolidated financial statements.
♦ 3.4.2.1.5 Default
exposures and value adjustments
► Quality of credit
exposures by category of exposures and instrument (CR1-A)
|
|
31.12.2018 |
|
|
Gross carrying values
of |
|
|
| € million |
Defaulted exposures |
Non-defaulted exposures |
Provisions / Impairment |
Net values |
| 1 Central governments or central banks |
78 |
83,208 |
25 |
83,261 |
| 2 Institutions |
380 |
66,974 |
400 |
66,954 |
| 3 Corporates |
3,097 |
246,057 |
2,562 |
246,592 |
| 4 Of which: Specialised lending |
1,230 |
57,743 |
761 |
58,212 |
| 5 Of which: SMEs |
8 |
879 |
7 |
880 |
| 6 Retail |
157 |
12,930 |
17 |
13,069 |
| 7 Secured by real estate property |
|
|
|
|
| 8 SMEs |
|
|
|
|
| 9 Non-SMEs |
|
|
|
|
| 10 Qualifying revolving |
|
|
|
|
| 11 Other retail |
157 |
12,930 |
17 |
13,069 |
| 12 SMEs |
14 |
108 |
|
122 |
| 13 Non-SMEs |
143 |
12,822 |
17 |
12,948 |
| 14 Equity |
|
290 |
|
290 |
| 15 Total IRB approach 31.12.2018 |
3,711 |
409,460 |
3,004 |
410,167 |
| Total IRB approach 31.12.2017 |
5,063 |
377,247 |
3,582 |
378,728 |
| 16 Central governments or central banks |
|
1,112 |
|
1,112 |
| 17 Regional governments or local authorities |
|
44 |
|
44 |
| 18 Public sector entities |
|
1 |
|
1 |
| 19 Multilateral development banks |
|
6 |
|
6 |
| 20 International organisations |
|
|
|
|
| 21 Institutions |
|
19,288 |
|
19,288 |
| 22 Corporates |
|
26,624 |
9 |
26,615 |
| 23 Of which: SMEs |
|
281 |
|
281 |
| 24 Retail |
|
817 |
|
817 |
| 25 Of which: SMEs |
|
|
|
|
| 26 Secured by mortgages on immovable property |
|
211 |
|
211 |
| 27 Of which: SMEs |
|
16 |
|
16 |
| 28 Exposures in default |
573 |
|
95 |
477 |
| 29 Items associated with particularly high risk |
|
|
|
|
| 30 Covered bonds |
|
|
|
|
| 31 Claims on institutions and corporates with a short-term
credit assessment |
|
|
|
|
| 32 Collective investments undertakings |
|
46 |
|
46 |
| 33 Equity exposures |
|
206 |
|
206 |
| 34 Other exposures |
|
3,321 |
|
3,321 |
| 35 Total standardised approach 31.12.2018 |
573 |
51,676 |
104 |
52,144 |
| Total standardised approach 31.12.2017 |
363 |
44,507 |
143 |
44,727 |
| 36 Total 31.12.2018 |
4,284 |
461,135 |
3,108 |
462,311 |
| Total 31.12.2017 |
5,427 |
421,754 |
3,725 |
423,456 |
Exposures in default amounted to €4.2 billion as at 31 December 2018, down 21%
compared
to 31 December 2017. They represent 1.3% of the total gross exposures compared to
1.5% at the end of 2017. The total amount of provisions/impairments fell by €0.6 billion
compared to the end of December 2017, particularly as a result of the reduction in
exposures in default.
► Age of exposures
in default (CR1-C)
|
|
31.12.2018 |
|
|
Gross carrying values
of |
|
|
| € million |
Defaulted exposures |
Non-defaulted exposures |
Provisions / Impairment |
Net values |
| 1 EUROPE |
2,154 |
285,714 |
1,748 |
286,120 |
| 2 France |
935 |
142,409 |
702 |
142,641 |
| 3 United-kingdom |
148 |
35,078 |
215 |
35,011 |
| 4 Germany |
18 |
15,496 |
47 |
15,467 |
| 5 Luxembourg |
67 |
15,150 |
3 |
15,213 |
| 6 Switzerland |
13 |
14,568 |
94 |
14,487 |
| 7 Italy |
470 |
13,401 |
203 |
13,668 |
| 8 Netherlands |
56 |
7,668 |
12 |
7,712 |
| 9 Spain |
159 |
7,117 |
141 |
7,136 |
| 10 Ireland |
59 |
5,009 |
22 |
5,045 |
| 12 Others (europe) |
229 |
29,818 |
309 |
29,740 |
| 13 Asia & oceania |
407 |
83,846 |
113 |
84,140 |
| 14 Japan |
33 |
39,074 |
6 |
39,101 |
| 15 Singapore |
18 |
9,422 |
9 |
9,431 |
| 16 South korea |
21 |
7,081 |
3 |
7,099 |
| 17 Hong Kong |
25 |
6,902 |
11 |
6,917 |
| 18 China |
33 |
5,021 |
1 |
5,052 |
| 20 Others (asia & oceania) |
277 |
16,346 |
83 |
16,540 |
| 21 North america |
96 |
64,083 |
298 |
63,881 |
| 22 United-states |
57 |
58,660 |
297 |
58,420 |
| 23 Others (north america) |
39 |
5,423 |
1 |
5,461 |
| 24 Central & south america |
556 |
12,120 |
300 |
12,376 |
| 25 Africa and middle east |
1,072 |
15,372 |
650 |
15,794 |
| 26 Total 31.12.2018 |
4,284 |
461,135 |
3,108 |
462,311 |
| 27 Total 31.12.2017 |
5,427 |
421,754 |
3,725 |
423,456 |
► Age of exposures
on watchlist (CR1-D)
|
|
31.12.2018 |
|
|
Gross carrying values |
| € million |
≤ 30 days |
>30 days ≤ 60 days |
>60 days ≤ 90 days |
>90 days ≤ 180 days |
>180 days ≤ 1 year |
>1 year |
| 1 Loans |
1,466 |
521 |
54 |
540 |
42 |
689 |
| 2 Debt securities |
|
|
|
|
|
|
| 3 Total exposures |
1,466 |
521 |
54 |
540 |
42 |
689 |
|
|
31.12.2017 |
|
|
Gross carrying values |
| € million |
≤ 30 days |
>30 days ≤ 60 days |
>60 days ≤ 90 days |
>90 days ≤ 180 days |
>180 days ≤ 1 year |
>1 year |
| 1 Loans |
40 |
7 |
|
|
|
|
| 2 Debt securities |
|
|
|
|
|
|
| 3 Total exposures |
40 |
7 |
|
|
|
|
The share of exposures in default for 30 days or more represents 60% at 31 December
2018 and 100% at 31 December 2017 of the total exposures in default.
► Non-performing
and restructured exposures (CR1-E)
|
|
31.12.2018 |
|
|
Gross carrying amount
of performing and non-performing exposures |
|
|
|
Of which performing but past due
>30 days and <=60 days |
Of which performing forborne |
Of which non-performing |
| € million |
|
|
|
|
Of which: defaulted |
| 10 Debt securities |
28,973 |
|
11 |
84 |
79 |
| 20 Loans and advances |
203,693 |
557 |
1,611 |
3,870 |
3,669 |
| 30 Off-balance sheet exposures |
257,318 |
|
92 |
365 |
339 |
|
|
31.12.2018 |
|
|
Gross carrying amount
of performing and non-performing exposures |
Accumulated impairment
and provisions and negative fair value adjustments due to credit
risk
|
|
|
On performing exposures |
On performing exposures |
On non-performing
exposures |
| € million |
Of which: impaired |
Of which: forborne |
|
Of which: forborne |
|
Of which: forborne |
| 10 Debt securities |
|
|
(6) |
|
(17) |
|
| 20 Loans and advances |
79 |
2,056 |
(596) |
(121) |
(2,166) |
(887) |
| 30 Off-balance sheet exposures |
3,669 |
26 |
277 |
4 |
96 |
6 |
|
|
31.12.2018 |
|
|
Collaterals and financial
guarantees received |
| € million |
On nonperforming exposures |
Of which: forborne exposures |
| 10 Debt securities |
|
|
| 20 Loans and advances |
867 |
1,652 |
| 30 Off-balance sheet exposures |
2 |
33 |
|
|
31.12.2017 |
|
|
Gross carrying amount
of performing and non-performing exposures |
|
|
|
Of which performing but past due
>30 days and <=60 days |
Of which performing forborne |
Of which non-performing |
| € million |
|
|
|
|
Of which: defaulted |
| 10 Debt securities |
30,000 |
194 |
|
248 |
195 |
| 20 Loans and advances |
183,379 |
1,522 |
2,414 |
4,342 |
4,183 |
| 30 Off-balance sheet exposures |
230,457 |
|
435 |
980 |
968 |
|
|
31.12.2017 |
|
|
Gross carrying amount
of performing and non-performing exposures |
Accumulated impairment
and provisions and negative f air value adjustments due to
credit risk
|
|
|
On performing exposures |
On performing exposures |
On non-performing
exposures |
| € million |
Of which: impaired |
Of which: forborne |
|
Of which: forborne |
|
Of which: forborne |
| 10 Debt securities |
248 |
|
|
|
(207) |
|
| 20 Loans and advances |
4,183 |
2,405 |
(953) |
(281) |
(2,362) |
(1,099) |
| 30 Off-balance sheet exposures |
|
46 |
|
27 |
221 |
3 |
|
|
31.12.2017 |
|
|
Collaterals and financial
guarantees received |
| € million |
On nonperforming exposures |
Of which: forborne exposures |
| 10 Debt securities |
|
|
| 20 Loans and advances |
1,081 |
2,281 |
| 30 Off-balance sheet exposures |
21 |
53 |
Information relating to non-performing and renegotiated exposures includes the
gross
carrying amount, related impairments, provisions and valuation adjustments associated
thereto, as well as the value of collateral and financial guarantees received.
► Credit quality
of restructured exposures (5A)
|
|
31.12.2018 |
|
|
All forborne exposures |
| € million |
|
of which: performing past-due |
of which non- performing |
of which: impaired |
of which: defaulted |
| 1 Debt securities (including at amortised cost and fair
value) |
11 |
|
|
|
|
| 2 Central banks |
|
|
|
|
|
| 3 General governments |
|
|
|
|
|
| 4 Credit institutions |
|
|
|
|
|
| 5 Other financial corporations |
|
|
|
|
|
| 6 Non-financial corporations |
11 |
|
|
|
|
| 7 Loans and advances (including at amortised cost and
fair value) |
3,668 |
|
2,056 |
1,999 |
2,011 |
| 8 Central banks |
|
|
|
|
|
| 9 General governments |
20 |
|
6 |
6 |
6 |
| 10 Credit institutions |
51 |
|
51 |
51 |
51 |
| 11 Other financial corporations |
132 |
|
132 |
132 |
132 |
| 12 Non-financial corporations |
3,444 |
|
1,854 |
1,809 |
1,809 |
| 12.1 Of which: Small and Medium-sized Enterprises |
|
|
|
|
|
| 12.2 Of which: Loans collateralised by commercial immovable
property |
|
|
|
|
|
| 13 Households |
21 |
|
14 |
3 |
14 |
| 13.1 Of which: Loans collateralised by residential immovable
property |
15 |
|
14 |
3 |
14 |
| 13.2 Of which: Credit for consumption |
|
|
|
|
|
| 14 Debt instruments other than hft |
3,679 |
|
2,056 |
1,999 |
2,011 |
| 15 Loan commitments given |
118 |
|
26 |
26 |
26 |
| Total exposures with forbearance measures |
3,797 |
|
2,083 |
2,025 |
2,037 |
|
|
31.12.2018 |
|
|
Impairment, provisions
and value adjustments |
|
|
|
Performing forborne
exposures |
Non-performing forborne
exposures |
Collateral and financial guarantees
received on forborne exposures |
| € million |
|
of which: value adjustments |
|
of which: value adjustments |
|
| 1 Debt securities (including at amortised cost and fair
value) |
|
|
|
|
|
| 2 Central banks |
|
|
|
|
|
| 3 General governments |
|
|
|
|
|
| 4 Credit institutions |
|
|
|
|
|
| 5 Other financial corporations |
|
|
|
|
|
| 6 Non-financial corporations |
|
|
|
|
|
| 7 Loans and advances (including at amortised cost and
fair value) |
(121) |
|
(887) |
|
1,652 |
| 8 Central banks |
|
|
|
|
|
| 9 General governments |
(1) |
|
(4) |
|
|
| 10 Credit institutions |
|
|
(25) |
|
|
| 11 Other financial corporations |
|
|
(76) |
|
|
| 12 Non-financial corporations |
(120) |
|
(782) |
|
1,638 |
| 12.1 Of which: Small and Medium-sized Enterprises |
|
|
|
|
|
| 12.2 Of which: Loans collateralised by commercial immovable
property |
|
|
|
|
|
| 13 Households |
|
|
|
|
14 |
| 13.1 Of which: Loans collateralised by residential immovable
property |
|
|
|
|
14 |
| 13.2 Of which: Credit for consumption |
|
|
|
|
|
| 14 Debt instruments other than hft |
(121) |
|
(887) |
|
1,652 |
| 15 Loan commitments given |
(4) |
|
(6) |
|
33 |
| Total exposures with forbearance measures |
(125) |
|
(893) |
|
1,685 |
► Changes in the
stock of specific credit risk adjustments (CR2-A)
|
|
31.12.2018 |
31.12.2017 |
| € million |
Accumulated specific credit risk
adjustment |
Accumulated general credit risk
adjustment |
Accumulated specific credit risk
adjustment |
Accumulated general credit risk
adjustment |
| 1 Opening balance |
2,985 |
|
2,841 |
1,371 |
| 2 Increases due to origination and acquisition |
271 |
|
666 |
27 |
| 3 Decreases due to derecognition |
(426) |
|
(278) |
(319) |
| 4 Changes due to change in credit risk (net) |
282 |
|
(456) |
|
| 5 Changes due to modifications without derecognition
(net) |
13 |
|
|
|
| 6 Changes due to update in the institution's methodology
for estimation (net) |
|
|
(229) |
(112) |
| 7 Decrease in allowance account due to write-offs |
(417) |
|
|
|
| 8 Other adjustments |
70 |
|
10 |
|
| 9 Closing balance (1) |
2,780 |
|
2,554 |
967 |
| 10 Recoveries of previously written-off amounts recorded
directly to the statement
of profit or loss
|
(103) |
|
(102) |
|
| 11 Amounts written-off directly to the statement of profit
or loss |
52 |
|
518 |
|
(1)
Differences in total provisions between CR2-A, CR1-A and CR1-C tables are mainly due
to divergences in scope. Impairment of fixed assets and equity investments and provisions
for guarantee commitments given are only included in the CR1-A and CR1-C.
► Changes in the
stock of defaulted and impaired loans and debt securities (RC2-B)
|
|
31.12.2018 |
| € million |
Gross carrying value defaulted
exposures |
| 1 Opening balance |
3,977 |
| 2 Loans and debt securities that have defaulted or impaired
since the last reporting
period
|
248 |
| 3 Returned to non-defaulted status |
(22) |
| 4 Amounts written off |
(214) |
| 5 Other changes |
(241) |
| 6 Closing balance |
3,748 |
3.4.2.2 CREDIT
RISK
Since the end of 2007, the ACPR has authorised Crédit Agricole CIB Group to use
internal
rating systems to calculate regulatory capital requirements as regards credit risk
for most of its scope. In addition, the ACPR has since 1 January 2008 authorised Crédit
Agricole CIB Group's main entities to use the Advanced Measurement Approach (AMA)
to calculate their regulatory capital requirements for operational risk. The Group's
other entities use the standardised approach, in accordance with regulations.
The main Crédit Agricole CIB Group subsidiaries or portfolios still using the standardised
method for measuring credit risk at 30 June 2018 were as follows:
| ― |
Union des Banques Arabes et Françaises (UBAF);
|
| ― |
Crédit Agricole CIB Miami;
|
| ― |
Crédit Agricole CIB Brazil;
|
| ― |
Crédit Agricole CIB Canada;
|
| ― |
Banca Leonardo;
|
| ― |
the real estate professionals portfolio,
|
CA Indosuez Wealth Management is subject to standard calculation methodology in
respect
of its operational risk only.
In accordance with the commitment made by the Group to gradually move toward the
advanced
method defined with the ACPR in May 2007 (roll-out plan), work is ongoing in the main
entities and portfolios still under the standard method' An update of the rollout
plan is sent annually to the competent authority.
The use of internal models to calculate the solvency ratios has enabled Crédit
Agricole
CIB Group to strengthen its risk management. Specifically, the development of "internal
ratings-based" approaches has led to the systematic and reliable collection of default
and loss histories for most Group entities. The establishment of this data history
makes it possible to quantify credit risk today by assigning an average Probability
of Default (PD) to each rating level, and for the "advanced internal rating" approaches
to assign a loss given default (LGD).
In addition, the parameters of the "Internal Ratings-Based" models are used in
the
definition, implementation and monitoring of the entities' risk and credit policies.
The internal risk assessment models thus promote the development of sound risk
management
practices by the Group's entities and improve the efficiency of the capital allocation
process by enabling a more fine-tuned measurement of capital consumption by each business
line and entity.
♦ 3.4.2.2.1 Exposure
to credit risk using the standard approach
CREDIT ASSESSMENT
USING THE STANDARD APPROACH
From now on, the Group uses external credit rating agency assessments to calculate
its weighted exposures in standardised approach. The remaining exposures are subject
to fixed weightings (simili Basel I).
► Standardised
approach - Exposure to credit risk and effects of credit risk mitigation
(CRM) at 31 December 2018 (CR4)
|
|
31.12.2018 |
|
|
Exposure classes |
|
|
Exposures before
CCF and CRM |
Exposures post-CCF
and CRM |
RWA and RWA density |
| € million |
On-balance sheet amount |
Off-balance sheet amount |
On-balance sheet amount |
Off-balance sheet amount |
RWA |
RWA density |
| 1 Central governments or central banks |
1,060 |
52 |
1,060 |
26 |
911 |
83.89% |
| 2 Regional governments or local authorities |
|
44 |
|
22 |
|
|
| 3 Public sector entities |
|
1 |
|
|
|
|
| 4 Multilateral developments banks |
|
6 |
|
3 |
3 |
100.00% |
| 5 International organisations |
|
|
|
|
|
|
| 6 Banks (Institutions) |
5,950 |
625 |
23,078 |
538 |
703 |
2.98% |
| 7 Corporate |
19,890 |
6,346 |
2,760 |
2,352 |
4,427 |
86.60% |
| 8 Retail |
733 |
83 |
733 |
39 |
580 |
75.13% |
| 9 Secured by mortgages on immovable property |
211 |
|
211 |
|
105 |
49.76% |
| 10 Equity |
206 |
|
206 |
|
207 |
100.49% |
| 11 Exposure in default |
470 |
7 |
470 |
3 |
520 |
109.94% |
| 12 Higher-risk categories |
|
|
|
|
|
|
| 13 Covered bonds |
|
|
|
|
|
|
| 14 Institutions and corporates with a short-term credit
assessment |
|
|
|
|
|
|
| 15 Collective investment undertakings |
46 |
|
46 |
|
15 |
32.61% |
| 16 Other items |
3,321 |
|
3,321 |
|
3,127 |
94.16% |
| 17 Total |
31,887 |
7,165 |
31,885 |
2,984 |
10,598 |
30.39% |
► Standardised
approach - Exposure to credit risk and effects of credit risk mitigation
(CRM) at 31 December 2017 (CR4)
|
|
31.12.2017 |
|
|
Exposure classes |
|
|
Exposures before
CCF and CRM |
Exposures post-CCF
and CRM |
RWA and RWA density |
| € million |
On-balance sheet amount |
Off-balance sheet amount |
On-balance sheet amount |
Off-balance sheet amount |
RWA |
RWA density |
| 1 Central governments or central banks |
950 |
23 |
950 |
11 |
568 |
59.11% |
| 2 Regional governments or local authorities |
|
42 |
|
21 |
|
0.00% |
| 3 Public sector entities |
|
1 |
|
|
|
0.00% |
| 4 Multilateral developments banks |
|
4 |
|
2 |
1 |
49.45% |
| 5 International organisations |
|
|
|
|
|
0.00% |
| 6 Banks (Institutions) |
3,733 |
614 |
17,251 |
468 |
591 |
3.33% |
| 7 Corporate |
15,588 |
6,130 |
2,067 |
2,249 |
3,753 |
86.97% |
| 8 Retail |
783 |
9 |
783 |
8 |
593 |
75.00% |
| 9 Secured by mortgages on immovable property |
154 |
25 |
154 |
12 |
83 |
50.00% |
| 10 Equity |
155 |
|
155 |
|
164 |
105.82% |
| 11 Exposure in default |
241 |
11 |
241 |
6 |
274 |
111.05% |
| 12 Higher-risk categories |
|
|
|
|
|
0.00% |
| 13 Covered bonds |
|
|
|
|
|
0.00% |
| 14 Institutions and corporates with a short-term credit
assessment |
|
|
|
|
|
0.00% |
| 15 Collective investment undertakings |
44 |
|
44 |
|
15 |
34.05% |
| 16 Other items |
2,903 |
|
2,903 |
|
2,758 |
95.01% |
| 17 Total |
24,552 |
6,858 |
24,548 |
2,776 |
8,800 |
32.21% |
► Standard approach
- Exposures by asset class and by risk weighting coefficient at
31 December 2018 (CR5)
|
|
31.12.2018 |
| € million |
Risk weight |
| Exposure classes |
0% |
2% |
4% |
10% |
20% |
35% |
| 1 Central governments or central banks |
691 |
|
|
|
|
|
| 2 Regional governments or local authorities |
22 |
|
|
|
|
|
| 3 Public sector entities |
|
|
|
|
|
|
| 4 Multilateral developments banks |
|
|
|
|
|
|
| 5 International organisations |
|
|
|
|
|
|
| 6 Institutions |
20,889 |
639 |
|
|
1,688 |
|
| 7 Corporate |
|
|
|
|
205 |
|
| 8 Retail |
|
|
|
|
|
|
| 9 Secured by mortgages on immovable property |
|
|
|
|
|
|
| 10 Equity exposure |
|
|
|
|
|
|
| 11 Exposure in default |
|
|
|
|
|
|
| 12 Items associated with particularly high risk |
|
|
|
|
|
|
| 13 Covered bonds |
|
|
|
|
|
|
| 14 Claims on institutions and corporate with a short-term
credit assessment |
|
|
|
|
|
|
| 15 Claims in the form of CIU |
10 |
|
|
4 |
11 |
|
| 16 Other items |
108 |
|
|
|
107 |
|
| 17 Total |
21,720 |
639 |
|
4 |
2,011 |
|
|
|
31.12.2018 |
| € million |
Risk weight |
| Exposure classes |
50% |
70% |
75% |
100% |
150% |
250% |
| 1 Central governments or central banks |
2 |
|
|
49 |
|
|
| 2 Regional governments or local authorities |
|
|
|
|
|
|
| 3 Public sector entities |
|
|
|
|
|
|
| 4 Multilateral developments banks |
|
|
|
3 |
|
|
| 5 International organisations |
|
|
|
|
|
|
| 6 Institutions |
125 |
|
|
245 |
30 |
|
| 7 Corporate |
1,055 |
|
|
3,838 |
14 |
|
| 8 Retail |
|
|
773 |
|
|
|
| 9 Secured by mortgages on immovable property |
211 |
|
|
|
|
|
| 10 Equity exposure |
|
|
|
205 |
|
1 |
| 11 Exposure in default |
|
|
|
379 |
94 |
|
| 12 Items associated with particularly high risk |
|
|
|
|
|
|
| 13 Covered bonds |
|
|
|
|
|
|
| 14 Claims on institutions and corporate with a short-term
credit assessment |
|
|
|
|
|
|
| 15 Claims in the form of CIU |
17 |
|
|
4 |
|
|
| 16 Other items |
|
|
|
3,106 |
|
|
| 17 Total |
1,410 |
|
773 |
7,828 |
138 |
1 |
|
|
31.12.2018 |
| € million |
Risk weight |
| Exposure classes |
370% |
1250% |
Others |
Deducted |
Total credit exposures amount |
o/w unrated |
| 1 Central governments or central banks |
|
|
|
344 |
1,086 |
1,086 |
| 2 Regional governments or local authorities |
|
|
|
|
22 |
22 |
| 3 Public sector entities |
|
|
|
|
|
|
| 4 Multilateral developments banks |
|
|
|
|
3 |
3 |
| 5 International organisations |
|
|
|
|
|
|
| 6 Institutions |
|
|
|
|
23,616 |
23,354 |
| 7 Corporate |
|
|
|
|
5,112 |
3,470 |
| 8 Retail |
|
|
|
|
773 |
773 |
| 9 Secured by mortgages on immovable property |
|
|
|
|
211 |
211 |
| 10 Equity exposure |
|
|
|
|
206 |
206 |
| 11 Exposure in default |
|
|
|
|
473 |
473 |
| 12 Items associated with particularly high risk |
|
|
|
|
|
|
| 13 Covered bonds |
|
|
|
|
|
|
| 14 Claims on institutions and corporate with a short-term
credit assessment |
|
|
|
|
|
|
| 15 Claims in the form of CIU |
|
|
|
|
46 |
46 |
| 16 Other items |
|
|
|
|
3,321 |
3,321 |
| 17 Total |
|
|
|
344 |
34,868 |
32,965 |
► Standard approach
- Exposures by asset class and by risk weighting coefficient at
31 December 2017 (CR5)
|
|
31.12.2017 |
| € million |
Risk weight |
| Exposure classes |
0% |
2% |
4% |
10% |
20% |
35% |
| 1 Central governments or central banks |
697 |
|
|
|
|
|
| 2 Regional governments or local authorities |
21 |
|
|
|
|
|
| 3 Public sector entities |
|
|
|
|
|
|
| 4 Multilateral developments banks |
|
|
|
|
|
|
| 5 International organisations |
|
|
|
|
|
|
| 6 Institutions |
15,313 |
798 |
|
|
1,237 |
|
| 7 Corporate |
|
|
|
|
461 |
|
| 8 Retail |
|
|
|
|
|
|
| 9 Secured by mortgages on immovable property |
|
|
|
|
|
|
| 10 Equity exposure |
|
|
|
|
|
|
| 11 Exposure in default |
|
|
|
|
|
|
| 12 Items associated with particularly high risk |
|
|
|
|
|
|
| 13 Covered bonds |
|
|
|
|
|
|
| 14 Claims on institutions and corporate with a short-term
credit assessment |
|
|
|
|
|
|
| 15 Claims in the form of CIU |
7 |
|
|
|
27 |
|
| 16 Other items |
133 |
|
|
|
15 |
|
| 17 Total |
16,172 |
798 |
|
|
1,739 |
|
|
|
31.12.2017 |
| € million |
Risk weight |
| Exposure classes |
50% |
70% |
75% |
100% |
150% |
250% |
| 1 Central governments or central banks |
25 |
|
|
28 |
|
|
| 2 Regional governments or local authorities |
|
|
|
|
|
|
| 3 Public sector entities |
|
|
|
|
|
|
| 4 Multilateral developments banks |
2 |
|
|
|
|
|
| 5 International organisations |
|
|
|
|
|
|
| 6 Institutions |
114 |
|
|
229 |
28 |
|
| 7 Corporate |
425 |
|
|
3,392 |
38 |
|
| 8 Retail |
|
|
791 |
|
|
|
| 9 Secured by mortgages on immovable property |
167 |
|
|
|
|
|
| 10 Equity exposure |
|
|
|
149 |
|
6 |
| 11 Exposure in default |
|
|
|
192 |
55 |
|
| 12 Items associated with particularly high risk |
|
|
|
|
|
|
| 13 Covered bonds |
|
|
|
|
|
|
| 14 Claims on institutions and corporate with a short-term
credit assessment |
|
|
|
|
|
|
| 15 Claims in the form of CIU |
2 |
|
|
9 |
|
|
| 16 Other items |
|
|
|
2,755 |
|
|
| 17 Total |
734 |
|
791 |
6,754 |
120 |
6 |
|
|
31.12.2017 |
| € million |
Risk weight |
| Exposure classes |
370% |
1250% |
Others |
Deducted |
Total credit exposures amount |
o/w unrated |
| 1 Central governments or central banks |
|
|
|
211 |
961 |
950 |
| 2 Regional governments or local authorities |
|
|
|
|
21 |
21 |
| 3 Public sector entities |
|
|
|
|
|
|
| 4 Multilateral developments banks |
|
|
|
|
2 |
2 |
| 5 International organisations |
|
|
|
|
|
|
| 6 Institutions |
|
|
|
|
17,719 |
17,459 |
| 7 Corporate |
|
|
|
|
4,316 |
2,846 |
| 8 Retail |
|
|
|
|
791 |
791 |
| 9 Secured by mortgages on immovable property |
|
|
|
|
167 |
167 |
| 10 Equity exposure |
|
|
|
|
155 |
155 |
| 11 Exposure in default |
|
|
|
|
247 |
247 |
| 12 Items associated with particularly high risk |
|
|
|
|
|
|
| 13 Covered bonds |
|
|
|
|
|
|
| 14 Claims on institutions and corporate with a short-term
credit assessment |
|
|
|
|
|
|
| 15 Claims in the form of CIU |
|
|
|
|
44 |
44 |
| 16 Other items |
|
|
|
|
2,903 |
2,903 |
| 17 Total |
|
|
|
211 |
27,325 |
25,584 |
♦ 3.4.2.2.2 Exposures
to credit risk under internal ratings-based approach
Credit exposures are classified by counterparty type and financial product type,
based
on the seven exposure classes shown in the table below and set out in Article 147
of Regulation (EU) 575/2013 of 26 June 2013 on capital requirements applicable to
credit institutions and investment firms:
| ― |
the exposure category "Central governments and central banks",
in addition to exposures
on governments and central banks, groups exposures on certain regional and local authorities
or on public-sector entities, which are treated as central administrations, and certain
multilateral development banks and international organisations;
|
| ― |
the "Institutions" class comprises exposure to credit institutions
and investment
firms, including those recognised in other countries. This category also includes
certain exposures on regional and local governments, public-sector entities and multilateral
development banks that are not considered as central governments;
|
| ― |
the "Corporates" class is divided into large corporates and small
and medium-sized
businesses, which are subject to different regulatory treatments;
|
| ― |
the "Retail customers" class distinguishes between mortgage loans,
revolving credits,
other credits to individuals and other loans to very small businesses and self-employed
professionals;
|
| ― |
the "Equity" class comprises exposures that convey a residual,
subordinated claim
on the assets or income of the issuer or have a similar economic substance;
|
| ― |
the "Securitisation" exposure category includes exposures to
securitisation operations
or structures, including those resulting from interest rate or exchange rate derivatives,
independently of the institution's role (whether it is the originator, sponsor or
investor);
|
| ― |
the "Other assets that do not correspond to credit obligations"
class mainly includes
non-current assets and accruals.
|
♦ 3.4.2.2.3 Quality
of exposures using the internal ratings-based approach
OVERVIEW OF THE
INTERNAL RATINGS-BASED SYSTEMS AND PROCEDURES
The internal ratings-based systems and procedures are presented in paragraph 2.4.2
of this chapter.
EXPOSURE TO CREDIT
RISK BY PORTFOLIO AND BY RANGE OF PROBABILITY OF DEFAULT (PD) ON
31 DECEMBER 2018 (CR6)
► Following prudential
portfolios for advanced internal ratings-based approach
| € million |
|
|
|
|
|
|
| PD scale |
Original on-balance sheet gross
exposure |
Off-balance sheet exposures pre
CCF |
Average CCF |
EAD post CRM and post-CCF |
Average PD |
Number of obligors |
| Central governments and central banks |
|
|
|
|
|
|
| 0.00 to < 0.15 |
68,908 |
2,890 |
66.98% |
81,026 |
0.01% |
|
| 0.15 to < 0.25 |
453 |
|
64.06% |
1,166 |
0.16% |
|
| 0.25 to < 0.50 |
378 |
|
0.00% |
378 |
0.30% |
|
| 0.50 to < 0.75 |
775 |
214 |
75.00% |
323 |
0.60% |
|
| 0.75 to < 2.50 |
296 |
490 |
75.00% |
45 |
1.24% |
|
| 2.50 to < 10.00 |
685 |
315 |
73.86% |
82 |
5.00% |
|
| 10.00 to < 100.00 |
84 |
108 |
76.34% |
26 |
12.41% |
|
| 100.00 (Default) |
78 |
|
0.00% |
31 |
100.00% |
|
| Sub-total |
71,657 |
4,017 |
66.96% |
83,077 |
0.06% |
|
| Institutions |
|
|
|
|
|
|
| 0.00 to < 0.15 |
31,788 |
4,215 |
81.80% |
37,672 |
0.03% |
|
| 0.15 to < 0.25 |
889 |
492 |
46.90% |
576 |
0.16% |
|
| 0.25 to < 0.50 |
789 |
1,165 |
39.05% |
1,139 |
0.30% |
|
| 0.50 to < 0.75 |
404 |
712 |
44.30% |
565 |
0.60% |
|
| 0.75 to < 2.50 |
842 |
1,087 |
41.53% |
856 |
0.96% |
|
| 2.50 to < 10.00 |
47 |
87 |
20.81% |
21 |
5.00% |
|
| 10.00 to < 100.00 |
95 |
24 |
27.69% |
100 |
19.48% |
|
| 100.00 (Default) |
377 |
|
0.00% |
377 |
100.00% |
|
| Sub-total |
35,230 |
7,782 |
69.99% |
41,306 |
1.02% |
|
| Corporates - Other |
|
|
|
|
|
|
| 0.00 to < 0.15 |
24,852.11 |
52,545.92 |
54.10% |
52,004.33 |
0.04% |
|
| 0.15 to < 0.25 |
10,376.50 |
15,404.11 |
56.69% |
16,316.30 |
0.16% |
|
| 0.25 to < 0.50 |
7,097.57 |
16,846.71 |
48.19% |
11,779.26 |
0.30% |
|
| 0.50 to < 0.75 |
7,763.35 |
8,947.16 |
59.28% |
9,489.95 |
0.60% |
|
| 0.75 to < 2.50 |
8,218.19 |
11,041.13 |
56.02% |
10,562.18 |
1.10% |
|
| 2.50 to < 10.00 |
495.45 |
635.69 |
55.95% |
303.64 |
5.00% |
|
| 10.00 to < 100.00 |
943.64 |
1,730.63 |
36.17% |
951.38 |
15.54% |
|
| 100.00 (Default) |
1,574.90 |
282.93 |
43.76% |
1,579.58 |
100.00% |
|
| Sub-total |
61,321.71 |
107,434.28 |
53.84% |
102,986.62 |
1.94% |
|
| Corporates - SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
5.55 |
3.56 |
20.00% |
6.21 |
0.06% |
|
| 0.15 to < 0.25 |
2.34 |
0.06 |
100.00% |
1.64 |
0.16% |
|
| 0.25 to < 0.50 |
2.77 |
2.54 |
54.78% |
4.16 |
0.30% |
|
| 0.50 to < 0.75 |
20.08 |
141.65 |
75.85% |
35.57 |
0.60% |
|
| 0.75 to < 2.50 |
127.37 |
246.73 |
49.36% |
216.70 |
1.33% |
|
| 2.50 to < 10.00 |
9.70 |
1.02 |
63.61% |
9.64 |
5.00% |
|
| 10.00 to < 100.00 |
51.37 |
162.69 |
75.10% |
161.41 |
19.64% |
|
| 100.00 (Default) |
7.41 |
0.15 |
84.72% |
7.53 |
100.00% |
|
| Sub-total |
226.57 |
558.39 |
60.44% |
442.86 |
9.67% |
|
| Corporates - Specialised Lending |
|
|
|
|
|
|
| 0.00 to < 0.15 |
1,764 |
1,419 |
51.18% |
9,198 |
0.03% |
|
| 0.15 to < 0.25 |
8,036 |
2,429 |
68.05% |
10,219 |
0.16% |
|
| 0.25 to < 0.50 |
10,573 |
2,943 |
63.51% |
10,421 |
0.30% |
|
| 0.50 to < 0.75 |
8,274 |
2,683 |
45.15% |
7,961 |
0.60% |
|
| 0.75 to < 2.50 |
10,506 |
3,679 |
57.63% |
9,774 |
1.12% |
|
| 2.50 to < 10.00 |
1,301 |
161 |
40.18% |
1,036 |
5.00% |
|
| 10.00 to < 100.00 |
1,672 |
241 |
59.39% |
1,127 |
15.74% |
|
| 100.00 (Default) |
1,195 |
29 |
78.00% |
1,159 |
100.00% |
|
| Sub-total |
43,320 |
13,584 |
57.21% |
50,896 |
3.14% |
|
| Retail - Qualifying revolving |
|
|
|
|
|
|
| 0.00 to < 0.15 |
10,832 |
|
0.00% |
10,832 |
0.09% |
|
| 0.15 to < 0.25 |
1,308 |
|
0.00% |
1,308 |
0.21% |
|
| 0.25 to < 0.50 |
525 |
|
0.00% |
525 |
0.60% |
|
| 0.50 to < 0.75 |
|
|
0.00% |
|
0.00% |
|
| 0.75 to < 2.50 |
38 |
|
72.83% |
38 |
1.60% |
|
| 2.50 to < 10.00 |
117 |
|
0.00% |
117 |
12.34% |
|
| 10.00 to < 100.00 |
|
|
0.00% |
|
20.00% |
|
| 100.00 (Default) |
143 |
|
0.00% |
143 |
100.00% |
|
| Sub-total |
12,964 |
|
72.83% |
12,964 |
1.24% |
|
| Retail - Other non-SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
85 |
|
0.00% |
85 |
0.09% |
|
| 0.15 to < 0.25 |
14 |
|
0.00% |
14 |
0.21% |
|
| 0.25 to < 0.50 |
6 |
|
0.00% |
6 |
0.60% |
|
| 0.50 to < 0.75 |
|
|
0.00% |
|
0.00% |
|
| 0.75 to < 2.50 |
1 |
|
0.00% |
1 |
1.60% |
|
| 2.50 to < 10.00 |
1 |
|
0.00% |
1 |
12.47% |
|
| 10.00 to < 100.00 |
|
|
0.00% |
|
0.00% |
|
| 100.00 (Default) |
14 |
|
0.00% |
14 |
100.00% |
|
| Sub-total |
122 |
|
0.00% |
122 |
11.68% |
|
| Total |
224,843 |
133,375 |
56.38% |
291,795 |
1.47% |
|
| € million |
|
|
|
|
|
|
| PD scale |
Average LGD |
Average maturity |
RWA |
RWA density |
Expected loss |
Value adjustments and provisions |
| Central governments and central banks |
|
|
|
|
|
|
| 0.00 to < 0.15 |
1.40% |
614 |
227 |
0.28% |
|
|
| 0.15 to < 0.25 |
10.00% |
1,031 |
116 |
9.99% |
|
|
| 0.25 to < 0.50 |
9.98% |
404 |
36 |
9.52% |
|
|
| 0.50 to < 0.75 |
10.00% |
559 |
47 |
14.65% |
|
|
| 0.75 to < 2.50 |
46.88% |
1,331 |
58 |
127.73% |
|
|
| 2.50 to < 10.00 |
59.76% |
1,459 |
140 |
171.06% |
2 |
|
| 10.00 to < 100.00 |
77.60% |
1,126 |
104 |
402.17% |
3 |
|
| 100.00 (Default) |
45.00% |
1,367 |
|
1.04% |
17 |
|
| Sub-total |
1.72% |
620 |
729 |
0.88% |
22 |
25 |
| Institutions |
|
|
|
|
|
|
| 0.00 to < 0.15 |
8.83% |
611 |
961 |
2.55% |
1 |
|
| 0.15 to < 0.25 |
39.17% |
747 |
258 |
44.77% |
|
|
| 0.25 to < 0.50 |
42.29% |
529 |
437 |
38.33% |
1 |
|
| 0.50 to < 0.75 |
52.66% |
425 |
383 |
67.74% |
1 |
|
| 0.75 to < 2.50 |
39.16% |
543 |
628 |
73.41% |
3 |
|
| 2.50 to < 10.00 |
74.74% |
326 |
56 |
267.61% |
1 |
|
| 10.00 to < 100.00 |
39.01% |
1,639 |
229 |
228.88% |
7 |
|
| 100.00 (Default) |
45.01% |
625 |
|
0.00% |
394 |
|
| Sub-total |
11.84% |
609 |
2,952 |
7.15% |
409 |
400 |
| Corporates - Other |
|
|
|
|
|
|
| 0.00 to < 0.15 |
35.56% |
729 |
7,385.22 |
14.20% |
7.98 |
|
| 0.15 to < 0.25 |
43.58% |
965 |
5,996.44 |
36.75% |
9.97 |
|
| 0.25 to < 0.50 |
49.51% |
959 |
6,305.91 |
53.53% |
13.52 |
|
| 0.50 to < 0.75 |
45.76% |
919 |
6,757.54 |
71.21% |
21.00 |
|
| 0.75 to < 2.50 |
45.60% |
1,109 |
9,756.80 |
92.37% |
42.84 |
|
| 2.50 to < 10.00 |
50.28% |
773 |
418.04 |
137.67% |
5.95 |
|
| 10.00 to < 100.00 |
41.71% |
1,005 |
1,589.98 |
167.12% |
48.78 |
|
| 100.00 (Default) |
45.12% |
843 |
11.40 |
0.72% |
1,309.82 |
|
| Sub-total |
40.64% |
854 |
38,221.33 |
37.11% |
1,459.85 |
1,793.82 |
| Corporates - SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
46.61% |
1,443 |
1.54 |
24.78% |
0.00 |
|
| 0.15 to < 0.25 |
47.34% |
662 |
0.49 |
30.11% |
0.00 |
|
| 0.25 to < 0.50 |
47.60% |
1,104 |
2.52 |
60.56% |
0.01 |
|
| 0.50 to < 0.75 |
35.76% |
623 |
17.12 |
48.13% |
0.07 |
|
| 0.75 to < 2.50 |
36.02% |
1,056 |
159.87 |
73.78% |
0.89 |
|
| 2.50 to < 10.00 |
38.42% |
1,134 |
10.50 |
108.87% |
0.18 |
|
| 10.00 to < 100.00 |
45.90% |
1,626 |
163.66 |
101.39% |
3.99 |
|
| 100.00 (Default) |
45.05% |
402 |
0.00 |
0.00% |
3.79 |
|
| Sub-total |
40.11% |
1,224 |
355.70 |
80.32% |
8.93 |
7.14 |
| Corporates - Specialised Lending |
|
|
|
|
|
|
| 0.00 to < 0.15 |
5.49% |
1,354 |
259 |
2.81% |
|
|
| 0.15 to < 0.25 |
9.73% |
1,350 |
1,046 |
10.24% |
1 |
|
| 0.25 to < 0.50 |
12.23% |
1,313 |
1,801 |
17.28% |
4 |
|
| 0.50 to < 0.75 |
11.62% |
1,286 |
1,736 |
21.81% |
5 |
|
| 0.75 to < 2.50 |
14.37% |
1,280 |
3,234 |
33.09% |
15 |
|
| 2.50 to < 10.00 |
15.65% |
1,121 |
559 |
53.97% |
8 |
|
| 10.00 to < 100.00 |
19.58% |
1,111 |
1,134 |
100.60% |
35 |
|
| 100.00 (Default) |
41.97% |
1,093 |
62 |
5.39% |
421 |
|
| Sub-total |
11.73% |
1,304 |
9,832 |
19.32% |
489 |
761 |
| Retail - Qualifying revolving |
|
|
|
|
|
|
| 0.00 to < 0.15 |
6.30% |
|
162 |
1.49% |
1 |
|
| 0.15 to < 0.25 |
25.57% |
|
145 |
11.05% |
1 |
|
| 0.25 to < 0.50 |
35.53% |
|
138 |
26.35% |
1 |
|
| 0.50 to < 0.75 |
0.00% |
|
|
0.00% |
|
|
| 0.75 to < 2.50 |
24.90% |
|
11 |
28.52% |
|
|
| 2.50 to < 10.00 |
28.15% |
|
43 |
36.64% |
3 |
|
| 10.00 to < 100.00 |
51.69% |
|
|
122.10% |
|
|
| 100.00 (Default) |
31.09% |
|
10 |
6.67% |
14 |
|
| Sub-total |
9.79% |
|
508 |
3.92% |
20 |
17 |
| Retail - Other non-SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
7.75% |
|
2 |
1.79% |
|
|
| 0.15 to < 0.25 |
33.48% |
|
2 |
14.60% |
|
|
| 0.25 to < 0.50 |
68.21% |
|
4 |
57.56% |
|
|
| 0.50 to < 0.75 |
0.00% |
|
|
0.00% |
|
|
| 0.75 to < 2.50 |
30.03% |
|
|
38.21% |
|
|
| 2.50 to < 10.00 |
57.69% |
|
1 |
101.73% |
|
|
| 10.00 to < 100.00 |
0.00% |
|
|
0.00% |
|
|
| 100.00 (Default) |
6.19% |
|
|
2.30% |
|
|
| Sub-total |
13.91% |
|
9 |
7.44% |
|
|
| Total |
19.06% |
|
52,607 |
18.03% |
2,409 |
3,004 |
EXPOSURE TO CREDIT
RISK BY PORTFOLIO AND BY RANGE OF PROBABILITY OF DEFAULT (PD) ON
31 DECEMBER 2017 (CR6)
► Following prudential
portfolios for advanced internal ratings-based approach
| € million |
|
|
|
|
|
|
| PD scale |
Original on-balance sheet gross
exposure |
Off-balance sheet exposures pre
CCF |
Average CCF |
EAD post CRM and post-CCF |
Average PD |
Number of obligors |
| Central governments and central banks |
|
|
|
|
|
|
| 0.00 to < 0.15 |
55,093 |
987 |
63.24% |
63,423 |
0.00% |
|
| 0.15 to < 0.25 |
72 |
|
54.35% |
531 |
0.16% |
|
| 0.25 to < 0.50 |
1,227 |
100 |
55.15% |
1,466 |
0.30% |
|
| 0.50 to < 0.75 |
686 |
294 |
75.00% |
284 |
0.60% |
|
| 0.75 to < 2.50 |
304 |
551 |
74.48% |
43 |
1.21% |
|
| 2.50 to < 10.00 |
129 |
163 |
74.06% |
19 |
5.00% |
|
| 10.00 to < 100.00 |
616 |
187 |
70.03% |
58 |
12.18% |
|
| 100.00 (Default) |
88 |
|
0.00% |
21 |
100.00% |
|
| Sub-total |
58,215 |
2,282 |
63.08% |
65,845 |
0.06% |
|
| Institutions |
|
|
|
|
|
|
| 0.00 to < 0.15 |
39,889 |
3,864 |
92.99% |
48,144 |
0.02% |
|
| 0.15 to < 0.25 |
720 |
230 |
44.81% |
574 |
0.16% |
|
| 0.25 to < 0.50 |
1,366 |
652 |
33.36% |
1,198 |
0.30% |
|
| 0.50 to < 0.75 |
1,478 |
768 |
36.03% |
1,024 |
0.60% |
|
| 0.75 to < 2.50 |
705 |
687 |
50.33% |
651 |
1.10% |
|
| 2.50 to < 10.00 |
20 |
71 |
24.21% |
7 |
5.00% |
|
| 10.00 to < 100.00 |
18 |
52 |
23.62% |
17 |
15.47% |
|
| 100.00 (Default) |
371 |
2 |
29.30% |
366 |
100.00% |
|
| Sub-total |
44,566 |
6,326 |
81.57% |
51,981 |
0.77% |
|
| Corporates - Other |
|
|
|
|
|
|
| 0.00 to < 0.15 |
19,201 |
54,422 |
48.87% |
45,025 |
0.04% |
|
| 0.15 to < 0.25 |
6,217 |
16,497 |
48.12% |
12,994 |
0.16% |
|
| 0.25 to < 0.50 |
8,955 |
14,162 |
50.73% |
13,552 |
0.30% |
|
| 0.50 to < 0.75 |
6,525 |
7,067 |
51.67% |
6,751 |
0.60% |
|
| 0.75 to < 2.50 |
7,631 |
9,683 |
51.97% |
9,479 |
1.04% |
|
| 2.50 to < 10.00 |
855 |
528 |
53.63% |
667 |
5.00% |
|
| 10.00 to < 100.00 |
1,027 |
2,658 |
41.33% |
1,586 |
14.82% |
|
| 100.00 (Default) |
2,169 |
894 |
55.53% |
2,480 |
100.00% |
|
| Sub-total |
52,579 |
105,910 |
49.31% |
92,534 |
3.21% |
|
| Corporates - SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
5 |
3 |
20.00% |
6 |
0.03% |
|
| 0.15 to < 0.25 |
1 |
1 |
82.46% |
2 |
0.17% |
|
| 0.25 to < 0.50 |
|
1 |
57.63% |
1 |
0.30% |
|
| 0.50 to < 0.75 |
17 |
3 |
73.36% |
19 |
0.60% |
|
| 0.75 to < 2.50 |
57 |
281 |
43.81% |
113 |
1.18% |
|
| 2.50 to < 10.00 |
19 |
12 |
83.80% |
28 |
5.00% |
|
| 10.00 to < 100.00 |
29 |
11 |
76.19% |
20 |
17.53% |
|
| 100.00 (Default) |
25 |
14 |
49.31% |
32 |
100.00% |
|
| Sub-total |
153 |
327 |
49.25% |
221 |
17.32% |
|
| Corporates - Specialised Lending |
|
|
|
|
|
|
| 0.00 to < 0.15 |
2,268 |
1,453 |
50.39% |
9,538 |
0.02% |
|
| 0.15 to < 0.25 |
7,953 |
1,768 |
64.85% |
8,771 |
0.16% |
|
| 0.25 to < 0.50 |
10,384 |
2,841 |
59.63% |
10,882 |
0.30% |
|
| 0.50 to < 0.75 |
6,040 |
2,644 |
60.53% |
6,064 |
0.60% |
|
| 0.75 to < 2.50 |
10,174 |
3,270 |
50.22% |
9,308 |
1.13% |
|
| 2.50 to < 10.00 |
1,650 |
276 |
72.55% |
1,065 |
5.00% |
|
| 10.00 to < 100.00 |
1,552 |
194 |
74.92% |
1,367 |
15.06% |
|
| 100.00 (Default) |
1,258 |
24 |
79.80% |
1,241 |
100.00% |
|
| Sub-total |
41,280 |
12,470 |
57.34% |
48,235 |
3.50% |
|
| Retail - Qualifying revolving |
|
|
|
|
|
|
| 0.00 to < 0.15 |
10,563 |
|
0.00% |
10,563 |
0.09% |
|
| 0.15 to < 0.25 |
1,220 |
|
0.00% |
1,220 |
0.20% |
|
| 0.25 to < 0.50 |
292 |
|
0.00% |
292 |
0.60% |
|
| 0.50 to < 0.75 |
|
|
0.00% |
|
0.00% |
|
| 0.75 to < 2.50 |
31 |
|
100.00% |
31 |
1.60% |
|
| 2.50 to < 10.00 |
67 |
|
0.00% |
67 |
12.80% |
|
| 10.00 to < 100.00 |
1 |
|
50.00% |
1 |
20.00% |
|
| 100.00 (Default) |
188 |
|
0.00% |
188 |
100.00% |
|
| Sub-total |
12,361 |
|
72.83% |
12,361 |
1.64% |
|
| Retail - Other non-SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
62 |
|
0.00% |
62 |
0.08% |
|
| 0.15 to < 0.25 |
29 |
|
0.00% |
31 |
0.21% |
|
| 0.25 to < 0.50 |
12 |
|
0.00% |
12 |
0.60% |
|
| 0.50 to < 0.75 |
|
|
0.00% |
|
0.00% |
|
| 0.75 to < 2.50 |
|
|
0.00% |
|
1.60% |
|
| 2.50 to < 10.00 |
15 |
|
0.00% |
15 |
13.09% |
|
| 10.00 to < 100.00 |
|
|
0.00% |
|
0.00% |
|
| 100.00 (Default) |
1 |
|
0.00% |
1 |
100.00% |
|
| Sub-total |
120 |
|
0.00% |
122 |
1.21% |
|
| Total |
209,274 |
127,316 |
53.57% |
271,299 |
1.97% |
|
| € million |
|
|
|
|
|
|
| PD scale |
Average LGD |
Average maturity |
RWA |
RWA density |
Expected loss |
Value adjustments and provisions |
| Central governments and central banks |
|
|
|
|
|
|
| 0.00 to < 0.15 |
1.12% |
|
74 |
0.12% |
|
|
| 0.15 to < 0.25 |
10.00% |
|
59 |
11.18% |
|
|
| 0.25 to < 0.50 |
15.74% |
|
229 |
15.60% |
1 |
|
| 0.50 to < 0.75 |
10.00% |
|
44 |
15.58% |
|
|
| 0.75 to < 2.50 |
47.28% |
|
52 |
121.72% |
|
|
| 2.50 to < 10.00 |
60.00% |
|
43 |
233.72% |
1 |
|
| 10.00 to < 100.00 |
67.55% |
|
208 |
360.02% |
5 |
|
| 100.00 (Default) |
45.00% |
|
3 |
14.47% |
15 |
|
| Sub-total |
1.68% |
|
713 |
1.08% |
22 |
44 |
| Institutions |
|
|
|
|
|
|
| 0.00 to < 0.15 |
7.54% |
|
1,105 |
2.29% |
1 |
|
| 0.15 to < 0.25 |
40.90% |
|
206 |
35.83% |
|
|
| 0.25 to < 0.50 |
45.33% |
|
424 |
35.41% |
1 |
|
| 0.50 to < 0.75 |
50.97% |
|
505 |
49.29% |
2 |
|
| 0.75 to < 2.50 |
33.22% |
|
373 |
57.23% |
2 |
|
| 2.50 to < 10.00 |
50.79% |
|
11 |
166.59% |
|
|
| 10.00 to < 100.00 |
60.88% |
|
56 |
324.19% |
1 |
|
| 100.00 (Default) |
45.03% |
|
|
0.01% |
383 |
|
| Sub-total |
10.25% |
|
2,679 |
5.15% |
392 |
389 |
| Corporates - Other |
|
|
|
|
|
|
| 0.00 to < 0.15 |
35.28% |
|
6,546 |
14.54% |
7 |
|
| 0.15 to < 0.25 |
45.03% |
|
4,901 |
37.72% |
8 |
|
| 0.25 to < 0.50 |
43.44% |
|
7,542 |
55.65% |
16 |
|
| 0.50 to < 0.75 |
44.74% |
|
4,781 |
70.82% |
15 |
|
| 0.75 to < 2.50 |
49.52% |
|
9,052 |
95.50% |
39 |
|
| 2.50 to < 10.00 |
40.99% |
|
850 |
127.47% |
12 |
|
| 10.00 to < 100.00 |
39.86% |
|
2,575 |
162.39% |
71 |
|
| 100.00 (Default) |
45.54% |
|
419 |
16.88% |
1,611 |
|
| Sub-total |
40.39% |
|
36,666 |
39.62% |
1,779 |
2,509 |
| Corporates - SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
51.15% |
|
|
6.78% |
|
|
| 0.15 to < 0.25 |
39.42% |
|
|
25.09% |
|
|
| 0.25 to < 0.50 |
47.64% |
|
|
67.74% |
|
|
| 0.50 to < 0.75 |
46.46% |
|
12 |
63.45% |
|
|
| 0.75 to < 2.50 |
42.88% |
|
98 |
86.55% |
1 |
|
| 2.50 to < 10.00 |
43.66% |
|
37 |
128.44% |
1 |
|
| 10.00 to < 100.00 |
40.58% |
|
32 |
161.06% |
1 |
|
| 100.00 (Default) |
45.03% |
|
1 |
2.24% |
3 |
|
| Sub-total |
43.60% |
|
181 |
81.68% |
6 |
3 |
| Corporates - Specialised Lending |
|
|
|
|
|
|
| 0.00 to < 0.15 |
5.47% |
|
252 |
2.64% |
|
|
| 0.15 to < 0.25 |
9.49% |
|
928 |
10.58% |
1 |
|
| 0.25 to < 0.50 |
12.60% |
|
1,868 |
17.17% |
4 |
|
| 0.50 to < 0.75 |
10.97% |
|
1,334 |
22.00% |
4 |
|
| 0.75 to < 2.50 |
14.85% |
|
3,279 |
35.22% |
15 |
|
| 2.50 to < 10.00 |
11.95% |
|
483 |
45.36% |
6 |
|
| 10.00 to < 100.00 |
19.42% |
|
1,274 |
93.22% |
35 |
|
| 100.00 (Default) |
38.30% |
|
44 |
3.54% |
510 |
|
| Sub-total |
11.70% |
|
9,461 |
19.61% |
576 |
510 |
| Retail - Qualifying revolving |
|
|
|
|
|
|
| 0.00 to < 0.15 |
8.34% |
|
200 |
1.89% |
1 |
|
| 0.15 to < 0.25 |
20.51% |
|
107 |
8.80% |
1 |
|
| 0.25 to < 0.50 |
38.98% |
|
83 |
28.32% |
1 |
|
| 0.50 to < 0.75 |
0.00% |
|
|
0.00% |
|
|
| 0.75 to < 2.50 |
25.80% |
|
9 |
30.50% |
|
|
| 2.50 to < 10.00 |
29.84% |
|
33 |
49.38% |
3 |
|
| 10.00 to < 100.00 |
52.38% |
|
1 |
123.74% |
|
|
| 100.00 (Default) |
46.76% |
|
1 |
0.49% |
13 |
|
| Sub-total |
10.91% |
|
434 |
3.51% |
18 |
13 |
| Retail - Other non-SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
8.72% |
|
1 |
1.90% |
|
|
| 0.15 to < 0.25 |
15.35% |
|
2 |
7.09% |
|
|
| 0.25 to < 0.50 |
17.01% |
|
2 |
14.36% |
|
|
| 0.50 to < 0.75 |
0.00% |
|
|
0.00% |
|
|
| 0.75 to < 2.50 |
32.99% |
|
|
42.36% |
|
|
| 2.50 to < 10.00 |
6.98% |
|
2 |
13.74% |
|
|
| 10.00 to < 100.00 |
0.00% |
|
|
0.00% |
|
|
| 100.00 (Default) |
74.98% |
|
|
1.32% |
|
|
| Sub-total |
12.34% |
|
7 |
6.01% |
|
|
| Total |
18.77% |
|
50,141 |
18.48% |
2,792 |
3,468 |
► PD and average
LGD by exposure category and geographic area at 31 December 2018
and 31 December 2017
|
|
|
31.12.2018 |
31.12.2017 |
|
|
|
IRBA Method |
IRBA Method |
| Exposure category |
Geographic risk area |
PD |
LGD |
PD |
LGD |
| Central governments and central banks |
Africa and Middle East |
0.19% |
5.50% |
0.19% |
5.50% |
|
|
North America |
0.02% |
1.00% |
0.01% |
1.00% |
|
|
Asia and Oceania (excluding Japan) |
0.30% |
18.67% |
0.30% |
18.67% |
|
|
Other |
3.38% |
37.75% |
3.16% |
46.20% |
|
|
Eastern Europe |
0.53% |
27.50% |
0.53% |
45.00% |
|
|
Western Europe (excluding Italy) |
2.01% |
35.17% |
0.53% |
45.00% |
|
|
France (including overseas territories) |
3.23% |
35.17% |
3.23% |
35.17% |
|
|
Italy |
0.12% |
5.50% |
0.12% |
5.50% |
|
|
Japan |
0.64% |
23.00% |
0.64% |
23.00% |
| Institutions |
Africa and Middle East |
1.12% |
30.00% |
0.63% |
30.00% |
|
|
North America |
3.91% |
30.00% |
0.63% |
22.86% |
|
|
Asia and Oceania (excluding Japan) |
3.01% |
30.00% |
0.63% |
22.86% |
|
|
Other |
4.59% |
44.50% |
3.71% |
38.33% |
|
|
Eastern Europe |
0.36% |
34.17% |
0.53% |
45.00% |
|
|
Western Europe (excluding Italy) |
3.82% |
38.33% |
1.12% |
38.33% |
|
|
France (including overseas territories) |
3.82% |
38.33% |
3.82% |
38.33% |
|
|
Italy |
0.45% |
30.00% |
0.32% |
30.00% |
|
|
Japan |
1.12% |
32.22% |
0.61% |
32.22% |
| Corporates |
Africa and Middle East |
2.78% |
40.67% |
0.63% |
30.00% |
|
|
North America |
3.24% |
14.66% |
0.63% |
22.86% |
|
|
Asia and Oceania (excluding Japan) |
3.24% |
16.49% |
0.63% |
22.86% |
|
|
Other |
2.95% |
25.97% |
3.71% |
38.33% |
|
|
Eastern Europe |
0.52% |
45.00% |
1.12% |
38.33% |
|
|
Western Europe (excluding Italy) |
2.81% |
19.26% |
1.12% |
38.33% |
|
|
France (including overseas territories) |
7.44% |
16.25% |
3.82% |
38.33% |
|
|
Italy |
3.01% |
14.69% |
0.32% |
30.00% |
|
|
Japan |
3.37% |
16.95% |
0.61% |
32.22% |
| Retail customers |
Asia and Oceania (excluding Japan) |
0.00% |
0.00% |
0.63% |
22.86% |
|
|
Other |
1.75% |
43.20% |
3.71% |
38.33% |
|
|
Western Europe (excluding Italy) |
3.73% |
45.29% |
1.12% |
38.33% |
|
|
France (including overseas territories) |
3.29% |
37.80% |
3.82% |
38.33% |
|
|
Italy |
3.29% |
56.00% |
0.32% |
30.00% |
♦ 3.4.2.2.4 Credit
derivatives used for hedging at 31 December 2018
OVERVIEW OF THE
INTERNAL RATINGS-BASED SYSTEMS AND PROCEDURES
Effect of credit derivatives used as credit risk mitigation techniques (CRM) on
risk
weighted assets (RWA) by internal ratings method on 31/12/2018.
► Effect of credit
derivatives on risk-weighted assets (CR7)
|
|
31.12.2018 |
| € million |
Pre-credit derivatives RWAs |
Actual RWAs |
| 1 Exposures under Foundation IRB |
|
|
| 2 Central governments and central banks |
|
|
| 3 Institutions |
|
|
| 4 Corporates - SMEs |
|
|
| 5 Corporates - Specialised lending |
|
|
| 6 Corporates - Other |
|
|
| 7 Exposures under Advanced IRB |
|
|
| 8 Central governments and central banks |
3 |
|
| 9 Institutions |
16 |
16 |
| 10 Corporates - SMEs |
4,283 |
2,982 |
| 11 Corporates - Specialised lending |
1 |
1 |
| 12 Corporates - Other |
|
|
| 13 Retail - Secured by real estate SMEs |
|
|
| 14 Retail - Secured by real estate non-SMEs |
|
|
| 15 Retail - Qualifying revolving |
|
|
| 16 Retail - Other SMEs |
|
|
| 17 Retail - Other non-SMEs |
|
|
| 18 Equity IRB |
|
|
| 19 Other non credit obligation assets |
|
|
| 20 Total |
4,303 |
2,999 |
♦ 3.4.2.2.5 Changes
of RWA between 31 December 2017 and 31 December 2018
► Risk-weighted
asset (RWA) cash flows for credit risk exposures using the internal
rating approach (CR8)
|
|
31.12.2018 |
| € million |
RWA amounts |
Capital requirements |
| 1 RWAs as at the end of the previous reporting period |
53,916 |
4,313 |
| 2 Asset size |
2,769 |
222 |
| 3 Asset quality |
35 |
3 |
| 4 Model updates |
|
|
| 5 Methodology and policy |
|
|
| 6 Acquisitions and disposals |
|
|
| 7 Foreign exchange movements |
1,161 |
93 |
| 8 Other |
|
|
| 9 RWAs as at the end of the reporting period |
57,882 |
4,631 |
♦ 3.4.2.2.6 Results
of backtesting for 2018
The backtesting system is described in the "Risk Management" part on page 182.
These ex-post controls are performed through the cycle on historical data covering
as long a period as possible. The following tables show the backtesting results for
2018 in respect of the probability of default (PD) and loss given default (LGD) models.
► IRB - Ex-post
controls of the probability of default (PD) by portfolio (CR9) at
31 December 2018
| Portfolio |
|
|
Number of obligors |
Average historical annual default
rate |
PD scale (%)
|
Weighted average PD |
Arithmetic average PD by obligors |
End of previous year |
End of previous year |
Defaulted obligors in the year |
|
| Sovereigns |
|
|
|
|
|
|
| 0 to < 0.15 |
0.00% |
0.01% |
90 |
101 |
0 |
0.00% |
| 0.15 to < 0.25 |
0.16% |
0.16% |
5 |
7 |
0 |
0.00% |
| 0.25 to < 0.50 |
0.30% |
0.30% |
9 |
7 |
0 |
0.00% |
| 0.50 to < 0.75 |
0.60% |
0.60% |
8 |
7 |
0 |
0.00% |
| 0.75 to < 2.50 |
1.20% |
1.45% |
18 |
15 |
0 |
0.00% |
| 2.50 to < 10.00 |
5.00% |
5.00% |
4 |
7 |
0 |
3.33% |
| 10.00 to < 100 |
12.02% |
13.33% |
12 |
12 |
1 |
4.52% |
| Total |
0.22% |
1.45% |
146 |
156 |
1 |
0.42% |
| Public authorities |
|
|
|
|
|
|
| 0 to < 0.15 |
|
|
|
|
|
|
| 0.15 to < 0.25 |
0.16% |
0.16% |
|
|
|
|
| 0.25 to < 0.50 |
0.30% |
0.30% |
|
|
|
|
| 0.50 to < 0.75 |
0.60% |
0.60% |
|
|
|
|
| 0.75 to < 2.50 |
|
|
|
|
|
|
| 2.50 to < 10.00 |
5.00% |
5.00% |
|
|
|
|
| 10.00 to < 100 |
|
|
|
|
|
|
| Total |
|
|
|
|
|
|
| Financial institutions |
|
|
|
|
|
|
| 0 to < 0.15 |
0.02% |
0.02% |
1,790 |
1,832 |
0 |
0.00% |
| 0.15 to < 0.25 |
0.16% |
0.16% |
619 |
752 |
0 |
0.00% |
| 0.25 to < 0.50 |
0.30% |
0.30% |
753 |
575 |
0 |
0.00% |
| 0.50 to < 0.75 |
0.60% |
0.60% |
561 |
409 |
0 |
0.00% |
| 0.75 to < 2.50 |
1.04% |
1.10% |
212 |
200 |
1 |
0.36% |
| 2.50 to < 10.00 |
5.00% |
5.00% |
23 |
19 |
0 |
0.00% |
| 10.00 to < 100 |
19.45% |
12.00% |
18 |
17 |
0 |
2.50% |
| Total |
0.19% |
0.29% |
3,976 |
3,804 |
1 |
0.04% |
| Corporates |
|
|
|
|
|
|
| 0 to < 0.15 |
0.04% |
0.04% |
793 |
741 |
2 |
0.05% |
| 0.15 to < 0.25 |
0.16% |
0.16% |
455 |
451 |
0 |
0.03% |
| 0.25 to < 0.50 |
0.30% |
0.30% |
590 |
622 |
2 |
0.31% |
| 0.50 to < 0.75 |
0.60% |
0.60% |
487 |
473 |
1 |
0.38% |
| 0.75 to < 2.50 |
1.12% |
1.23% |
1,102 |
1,001 |
16 |
1.24% |
| 2.50 to < 10.00 |
5.00% |
5.00% |
101 |
109 |
5 |
2.34% |
| 10.00 to < 100 |
14.11% |
16.81% |
143 |
133 |
6 |
6.76% |
| Total |
0.66% |
1.30% |
3,671 |
3,530 |
32 |
0.89% |
| Specialised lending |
|
|
|
|
|
|
| 0 to < 0.15 |
0.06% |
0.06% |
87 |
69 |
0 |
0.00% |
| 0.15 to < 0.25 |
0.16% |
0.16% |
254 |
309 |
0 |
0.00% |
| 0.25 to < 0.50 |
0.30% |
0.30% |
508 |
468 |
1 |
0.23% |
| 0.50 to < 0.75 |
0.60% |
0.60% |
209 |
206 |
0 |
0.26% |
| 0.75 to < 2.50 |
1.17% |
1.09% |
322 |
356 |
0 |
1.29% |
| 2.50 to < 10.00 |
5.00% |
5.00% |
79 |
46 |
5 |
0.81% |
| 10.00 to < 100 |
15.35% |
14.61% |
55 |
49 |
10 |
8.26% |
| Total |
1.13% |
1.10% |
1,514 |
1,503 |
16 |
0.96% |
3.4.2.3 COUNTERPARTY
RISK
Crédit Agricole CIB, like its parent, addresses counterparty risks for all of its
exposures, whether these depend on the banking portfolio or the trading book (portfolio).
For items in the trading book, counterparty risk is calculated in accordance with
the provisions relating to the regulatory supervision of market risk.
The regulatory treatment of counterparty risk on transactions on forward financial
instruments in the banking portfolio is defined on a regulatory basis in Regulation
(EU) 575/2013 of 26 June 2013. Crédit Agricole S.A. Group uses the market price method
to measure its exposure to counterparty risk on transactions on forward financial
instruments in the banking portfolio (Article 274) or the internal model method (Article
283) within the scope of Crédit Agricole CIB.
♦ 3.4.2.3.1 Analysis
of the exposure to counterparty risks (CRR)
► Analysis of
the exposure to counterparty risks (CCR) by type of approach
|
|
31.12.2018 |
|
|
Standard |
IRB |
| € million |
Gross exposure |
EAD |
RWA |
CR |
Gross exposure |
EAD |
| Central governments or central banks |
|
|
|
|
7,612 |
7,578 |
| Institutions |
12,712 |
12,712 |
818 |
65 |
24,342 |
24,870 |
| Corporates |
388 |
380 |
330 |
26 |
22,710 |
21,985 |
| Retail customers |
|
|
|
|
|
|
| Equities |
|
|
|
|
|
|
| Securitisation |
|
|
|
|
|
|
| Assets other than credit obligation |
|
|
|
|
|
|
| Total |
13,100 |
13,092 |
1,148 |
92 |
54,663 |
54,433 |
|
|
31.12.2018 |
|
|
IRB |
|
Total |
| € million |
RWA |
CR |
Gross exposure |
EAD |
RWA |
CR |
| Central governments or central banks |
125 |
10 |
7,612 |
7,578 |
125 |
10 |
| Institutions |
3,816 |
305 |
37,054 |
37,582 |
4,634 |
371 |
| Corporates |
6,945 |
556 |
23,097 |
22,365 |
7,275 |
582 |
| Retail customers |
|
|
|
|
|
|
| Equities |
|
|
|
|
|
|
| Securitisation |
|
|
|
|
|
|
| Assets other than credit obligation |
|
|
|
|
|
|
| Total |
10,885 |
871 |
67,763 |
67,525 |
12,034 |
963 |
(1)
Initial gross exposure.
(2)
Gross exposure after credit risk mitigation (CRM).
|
|
31.12.2017 |
|
|
Standard |
IRB |
| € million |
Gross exposure |
EAD |
RWA |
CR |
Gross exposure |
EAD |
| Central governments or central banks |
|
|
|
|
7,167 |
7,130 |
| Institutions |
13,066 |
13,066 |
549 |
44 |
21,393 |
21,538 |
| Corporates |
256 |
251 |
206 |
16 |
16,795 |
16,653 |
| Retail customers |
|
|
|
|
|
|
| Equities |
|
|
|
|
|
|
| Securitisation |
|
|
|
|
|
|
| Assets other than credit obligation |
|
|
|
|
|
|
| Total |
13,322 |
13,317 |
755 |
60 |
45,345 |
45,141 |
|
|
31.12.2017 |
|
|
IRB |
Total |
| € million |
RWA |
CR |
Gross exposure |
EAD |
RWA |
CR |
| Central governments or central banks |
256 |
20 |
7,167 |
7,130 |
256 |
20 |
| Institutions |
3,594 |
288 |
34,459 |
34,423 |
4,143 |
331 |
| Corporates |
5,743 |
459 |
17,041 |
16,905 |
5,949 |
476 |
| Retail customers |
|
|
|
|
|
|
| Equities |
|
|
|
|
|
|
| Securitisation |
|
|
|
|
|
|
| Assets other than credit obligation |
|
|
|
|
|
|
| Total |
9,593 |
767 |
58,667 |
58,458 |
10,348 |
828 |
(1)
Initial gross exposure.
(2)
Gross exposure after credit risk mitigation (CRM).
Total gross exposure to counterparty risk stood at €67.8 billion on 31 December
2018
(in the form of derivative instruments for €45.7 billion and in the form of securities
financing transactions for €22 billion).
♦ 3.4.2.3.2 Exposure
to counterparty risk by the standard method
► Exposure to
counterparty risk using the standard method by regulatory portfolio
and by risk-weighting at 31 December 2018 (CCR3)
| € million |
31.12.2018 |
| Regulatory portfolio |
0.0% |
2.0% |
4.0% |
10.0% |
20.0% |
35.0% |
| Central governments or central banks |
|
|
|
|
|
|
| Regional governments or local authorities |
|
|
|
|
|
|
| Public sector entities |
|
|
|
|
|
|
| Multilateral developments banks |
|
|
|
|
|
|
| International organisations |
|
|
|
|
|
|
| Banks (Institutions) |
36 |
9,899 |
|
|
2,660 |
|
| Corporate |
|
|
|
|
1 |
|
| Retail |
|
|
|
|
|
|
| Default |
|
|
|
|
|
|
| Institutions and corporates with a short-term credit
assessment |
|
|
|
|
|
|
| Other items |
|
|
|
|
|
|
| Total |
36 |
9,899 |
|
|
2,661 |
|
| € million |
31.12.2018 |
| Regulatory portfolio |
50.0% |
70.0% |
75.0% |
100.0% |
150.0% |
Others |
| Central governments or central banks |
|
|
|
|
|
|
| Regional governments or local authorities |
|
|
|
|
|
|
| Public sector entities |
|
|
|
|
|
|
| Multilateral developments banks |
|
|
|
|
|
|
| International organisations |
|
|
|
|
|
|
| Banks (Institutions) |
58 |
|
|
59 |
|
|
| Corporate |
98 |
|
|
281 |
|
|
| Retail |
|
|
|
|
|
|
| Default |
|
|
|
|
|
|
| Institutions and corporates with a short-term credit
assessment |
|
|
|
|
|
|
| Other items |
|
|
|
|
|
|
| Total |
156 |
|
|
340 |
|
|
| € million |
31.12.2018 |
| Regulatory portfolio |
Exposure to counterparty risk |
Of which unrated |
| Central governments or central banks |
|
|
| Regional governments or local authorities |
|
|
| Public sector entities |
|
|
| Multilateral developments banks |
|
|
| International organisations |
|
|
| Banks (Institutions) |
12,712 |
12,636 |
| Corporate |
380 |
197 |
| Retail |
|
|
| Default |
|
|
| Institutions and corporates with a short-term credit
assessment |
|
|
| Other items |
|
|
| Total |
13,092 |
12,832 |
► Exposure to
counterparty risk using the standard method by regulatory portfolio
and by risk-weighting at 31 December 2017 (CCR3)
| € million |
31.12.2017 |
| Regulatory portfolio |
0.0% |
2.0% |
4.0% |
10.0% |
20.0% |
35.0% |
| Central governments or central banks |
|
|
|
|
|
|
| Regional governments or local authorities |
|
|
|
|
|
|
| Public sector entities |
|
|
|
|
|
|
| Multilateral developments banks |
|
|
|
|
|
|
| International organisations |
|
|
|
|
|
|
| Banks (Institutions) |
35 |
11,673 |
|
|
1,286 |
|
| Corporate |
|
|
|
|
21 |
|
| Retail |
|
|
|
|
|
|
| Default |
|
|
|
|
|
|
| Institutions and corporates with a short-term credit
assessment |
|
|
|
|
|
|
| Other items |
|
|
|
|
|
|
| Total |
35 |
11,673 |
|
|
1,306 |
|
| € million |
31.12.2017 |
| Regulatory portfolio |
50.0% |
70.0% |
75.0% |
100.0% |
150.0% |
Others |
| Central governments or central banks |
|
|
|
|
|
|
| Regional governments or local authorities |
|
|
|
|
|
|
| Public sector entities |
|
|
|
|
|
|
| Multilateral developments banks |
|
|
|
|
|
|
| International organisations |
|
|
|
|
|
|
| Banks (Institutions) |
28 |
|
|
44 |
|
|
| Corporate |
58 |
|
|
173 |
|
|
| Retail |
|
|
|
|
|
|
| Default |
|
|
|
|
|
|
| Institutions and corporates with a short-term credit
assessment |
|
|
|
|
|
|
| Other items |
|
|
|
|
|
|
| Total |
86 |
|
|
217 |
|
|
| € million |
31.12.2017 |
| Regulatory portfolio |
Exposure to counterparty risk |
Of which unrated |
| Central governments or central banks |
|
|
| Regional governments or local authorities |
|
|
| Public sector entities |
|
|
| Multilateral developments banks |
|
|
| International organisations |
|
|
| Banks (Institutions) |
13,066 |
13,010 |
| Corporate |
251 |
101 |
| Retail |
|
|
| Default |
|
|
| Institutions and corporates with a short-term credit
assessment |
|
|
| Other items |
|
|
| Total |
13,317 |
13,111 |
♦ 3.4.2.3.3 Exposure
to counterparty risk by the advanced method
► Exposure to
counterparty risk by portfolio and by range of probability of default
(PD) at 31 December 2018, following prudential portfolios for the advanced internal
ratings-based approach (CCR4)
| € million |
31.12.2018 |
| PD scale |
EAD post-CRM |
Average PD |
Average LGD |
Average maturity |
RWA |
RWA density |
| Central governments and central banks |
|
|
|
|
|
|
| 0.00 to < 0.15 |
7,201 |
0.01% |
1.29% |
1,050 |
18 |
0.25% |
| 0.15 to < 0.25 |
172 |
0.16% |
10.00% |
1,031 |
14 |
7.89% |
| 0.25 to < 0.50 |
106 |
0.30% |
9.98% |
404 |
9 |
8.92% |
| 0.50 to < 0.75 |
74 |
0.60% |
10.00% |
559 |
12 |
16.70% |
| 0.75 to < 2.50 |
54 |
1.19% |
45.70% |
1,333 |
59 |
110.76% |
| 2.50 to < 10.00 |
|
0.00% |
0.00% |
|
|
0.00% |
| 10.00 to < 100.00 |
5 |
19.85% |
56.70% |
1,139 |
12 |
264.80% |
| 100.00 (Default) |
|
0.00% |
0.00% |
|
|
0.00% |
| Sub-total |
7,612 |
0.04% |
2.03% |
1,037 |
125 |
1.64% |
| Institutions |
|
|
|
|
|
|
| 0.00 to < 0.15 |
20,275 |
0.03% |
11.30% |
627 |
1,361 |
6.71% |
| 0.15 to < 0.25 |
1,887 |
0.16% |
39.17% |
747 |
716 |
37.94% |
| 0.25 to < 0.50 |
1,362 |
0.30% |
42.29% |
529 |
772 |
56.66% |
| 0.50 to < 0.75 |
474 |
0.60% |
52.66% |
425 |
420 |
88.63% |
| 0.75 to < 2.50 |
838 |
0.81% |
31.04% |
773 |
270 |
32.21% |
| 2.50 to < 10.00 |
12 |
5.00% |
74.74% |
326 |
34 |
293.57% |
| 10.00 to < 100.00 |
113 |
19.99% |
35.50% |
1,738 |
242 |
213.94% |
| 100.00 (Default) |
3 |
100.00% |
45.01% |
625 |
1 |
24.78% |
| Sub-total |
24,964 |
0.19% |
16.53% |
635 |
3,816 |
15.29% |
| Corporates - Other |
|
|
|
|
|
|
| 0.00 to < 0.15 |
12,321 |
0.04% |
34.47% |
693 |
1,342 |
10.89% |
| 0.15 to < 0.25 |
1,957 |
0.16% |
43.58% |
965 |
972 |
49.69% |
| 0.25 to < 0.50 |
2,152 |
0.30% |
49.51% |
959 |
1,004 |
46.65% |
| 0.50 to < 0.75 |
1,893 |
0.60% |
45.76% |
919 |
1,175 |
62.05% |
| 0.75 to < 2.50 |
1,527 |
1.07% |
46.42% |
1,119 |
1,281 |
83.92% |
| 2.50 to < 10.00 |
80 |
5.00% |
50.28% |
773 |
106 |
132.98% |
| 10.00 to < 100.00 |
197 |
19.03% |
44.23% |
845 |
513 |
260.88% |
| 100.00 (Default) |
2 |
100.00% |
45.12% |
843 |
1 |
55.21% |
| Sub-total |
20,129 |
0.42% |
39.04% |
802 |
6,395 |
31.77% |
| Corporates - SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
63 |
0.03% |
47.06% |
1,296 |
13 |
21.43% |
| 0.15 to < 0.25 |
3 |
0.16% |
47.34% |
662 |
1 |
38.33% |
| 0.25 to < 0.50 |
3 |
0.30% |
47.60% |
1,104 |
2 |
58.27% |
| 0.50 to < 0.75 |
2 |
0.60% |
35.76% |
623 |
1 |
83.37% |
| 0.75 to < 2.50 |
29 |
1.33% |
34.91% |
1,039 |
31 |
105.99% |
| 2.50 to < 10.00 |
2 |
5.00% |
38.42% |
1,134 |
3 |
175.04% |
| 10.00 to < 100.00 |
1 |
19.44% |
45.56% |
1,596 |
1 |
211.00% |
| 100.00 (Default) |
|
100.00% |
45.05% |
402 |
|
12.79% |
| Sub-total |
102 |
0.94% |
43.37% |
1,186 |
53 |
51.60% |
| Corporates - Specialised lending |
|
|
|
|
|
|
| 0.00 to < 0.15 |
587 |
0.06% |
9.99% |
1,317 |
36 |
6.17% |
| 0.15 to < 0.25 |
409 |
0.16% |
9.73% |
1,350 |
58 |
14.18% |
| 0.25 to < 0.50 |
421 |
0.30% |
12.23% |
1,313 |
98 |
23.33% |
| 0.50 to < 0.75 |
291 |
0.60% |
11.62% |
1,286 |
68 |
23.48% |
| 0.75 to < 2.50 |
226 |
0.96% |
14.04% |
1,232 |
73 |
32.31% |
| 2.50 to < 10.00 |
25 |
5.00% |
15.65% |
1,121 |
8 |
32.55% |
| 10.00 to < 100.00 |
104 |
14.28% |
18.61% |
1,121 |
155 |
149.00% |
| 100.00 (Default) |
5 |
100.00% |
41.97% |
1,093 |
|
0.00% |
| Sub-total |
2,068 |
1.29% |
11.64% |
1,296 |
496 |
24.01% |
| Total |
54,875 |
0.30% |
22.59% |
|
10,885 |
19.84% |
► Exposure to
counterparty risk by portfolio and by range of probability of default
(PD) at 31 December 2017, following prudential portfolios for the advanced internal
ratings-based approach (CCR4)
| € million |
31.12.2017 |
| PD scale |
EAD post-CRM |
Average PD |
Average LGD |
Average maturity |
RWA |
RWA density |
| Central governments and central banks |
|
|
|
|
|
|
| 0.00 to < 0.15 |
6,776 |
0.01% |
1.05% |
1,069 |
15 |
0.23% |
| 0.15 to < 0.25 |
36 |
0.16% |
10.00% |
1,251 |
2 |
6.91% |
| 0.25 to < 0.50 |
140 |
0.30% |
15.74% |
495 |
15 |
10.69% |
| 0.50 to < 0.75 |
36 |
0.60% |
10.00% |
642 |
6 |
16.39% |
| 0.75 to < 2.50 |
169 |
0.97% |
46.48% |
1,333 |
189 |
111.48% |
| 2.50 to < 10.00 |
|
0.00% |
0.00% |
|
|
0.00% |
| 10.00 to < 100.00 |
10 |
19.98% |
50.66% |
1,652 |
28 |
274.80% |
| 100.00 (Default) |
|
0.00% |
0.00% |
|
|
0.00% |
| Sub-total |
7,167 |
0.07% |
2.56% |
1,064 |
256 |
3.57% |
| Institutions |
|
|
|
|
|
|
| 0.00 to < 0.15 |
17,419 |
0.04% |
12.58% |
784 |
1,314 |
7.54% |
| 0.15 to < 0.25 |
1,550 |
0.16% |
40.90% |
651 |
600 |
38.73% |
| 0.25 to < 0.50 |
1,287 |
0.30% |
45.33% |
447 |
790 |
61.36% |
| 0.50 to < 0.75 |
671 |
0.60% |
50.97% |
167 |
526 |
78.42% |
| 0.75 to < 2.50 |
409 |
0.84% |
31.81% |
742 |
241 |
58.85% |
| 2.50 to < 10.00 |
4 |
5.00% |
50.79% |
737 |
9 |
224.04% |
| 10.00 to < 100.00 |
53 |
19.48% |
38.15% |
1,489 |
114 |
214.28% |
| 100.00 (Default) |
|
100.00% |
45.03% |
631 |
|
59.31% |
| Sub-total |
21,393 |
0.14% |
18.24% |
736 |
3,594 |
16.80% |
| Corporates - Other |
|
|
|
|
|
|
| 0.00 to < 0.15 |
7,897 |
0.04% |
38.42% |
830 |
969 |
12.27% |
| 0.15 to < 0.25 |
1,528 |
0.16% |
45.03% |
965 |
642 |
42.05% |
| 0.25 to < 0.50 |
1,986 |
0.30% |
43.44% |
952 |
1,157 |
58.26% |
| 0.50 to < 0.75 |
1,047 |
0.60% |
44.74% |
871 |
726 |
69.35% |
| 0.75 to < 2.50 |
1,200 |
0.94% |
49.95% |
1,120 |
1,066 |
88.79% |
| 2.50 to < 10.00 |
81 |
5.00% |
40.99% |
789 |
95 |
117.85% |
| 10.00 to < 100.00 |
130 |
16.93% |
40.95% |
748 |
278 |
212.89% |
| 100.00 (Default) |
19 |
100.00% |
45.54% |
887 |
2 |
12.29% |
| Sub-total |
13,888 |
0.52% |
41.37% |
889 |
4,935 |
35.53% |
| Corporates - SME |
|
|
|
|
|
|
| 0.00 to < 0.15 |
53 |
0.03% |
48.06% |
1,210 |
9 |
16.98% |
| 0.15 to < 0.25 |
|
0.17% |
39.42% |
668 |
|
38.90% |
| 0.25 to < 0.50 |
6 |
0.30% |
47.64% |
1,216 |
4 |
60.08% |
| 0.50 to < 0.75 |
3 |
0.60% |
46.46% |
781 |
2 |
80.31% |
| 0.75 to < 2.50 |
36 |
1.59% |
44.28% |
1,140 |
39 |
106.81% |
| 2.50 to < 10.00 |
4 |
5.00% |
43.66% |
1,260 |
7 |
163.15% |
| 10.00 to < 100.00 |
3 |
19.22% |
39.74% |
499 |
6 |
245.97% |
| 100.00 (Default) |
|
100.00% |
45.03% |
1,200 |
|
0.00% |
| Sub-total |
106 |
1.58% |
46.32% |
1,158 |
67 |
63.06% |
| Corporates - Specialised lending |
|
|
|
|
|
|
| 0.00 to < 0.15 |
752 |
0.06% |
10.84% |
1,309 |
57 |
7.62% |
| 0.15 to < 0.25 |
734 |
0.16% |
9.49% |
1,363 |
97 |
13.28% |
| 0.25 to < 0.50 |
584 |
0.30% |
12.60% |
1,242 |
129 |
22.09% |
| 0.50 to < 0.75 |
271 |
0.60% |
10.97% |
1,328 |
80 |
29.41% |
| 0.75 to < 2.50 |
250 |
1.00% |
13.90% |
1,221 |
64 |
25.69% |
| 2.50 to < 10.00 |
52 |
5.00% |
11.95% |
1,234 |
15 |
28.03% |
| 10.00 to < 100.00 |
138 |
18.11% |
20.24% |
1,314 |
299 |
216.93% |
| 100.00 (Default) |
10 |
100.00% |
38.30% |
1,143 |
|
0.00% |
| Sub-total |
2,791 |
1.57% |
11.70% |
1,302 |
741 |
26.55% |
| Total |
45,345 |
0.34% |
22.49% |
870 |
9,593 |
21.15% |
♦ 3.4.2.3.4 Changes
to RWA by the internal rating approach (IMM) between 31.12.2017
and 31.12.2018
► Risk-weighted
asset (RWA) cash flows for counterparty risk exposures (CCR) using
the internal rating approach (MMI) (CCR7)
|
|
31.12.2018 |
| € million |
RWA amounts |
Capital requirements |
| 1 RWAs as at the end of the previous reporting period |
8,039 |
643 |
| 2 Asset size |
(879) |
(70) |
| 3 Credit quality of counterparties |
490 |
39 |
| 4 Model updates (IMM only) |
|
|
| 5 Methodology and policy (IMM only) |
|
|
| 6 Acquisitions and disposals |
|
|
| 7 Foreign exchange movements |
996 |
80 |
| 8 Other |
(282) |
(23) |
| 9 RWAs as at the end of the current reporting period |
8,363 |
669 |
3.4.2.4 CVA
CRD 4 introduced a new capital charge to reflect Credit Valuation Adjustment (CVA)
volatility, a valuation adjustment on assets known as CVA Risk, whose purpose is to
recognise credit events affecting our counterparties in the valuation of OTC derivatives.
As such, CVA is defined as the difference between the valuation without default risk
and the valuation that takes into account the probability of default of our counterparties.
Under this directive, institutions use a supervisory formula ("standard method") or
calculate their capital
requirements using the internal model for counterparty risk and the advanced approach
("CVA VaR") for specific interest rate risk. The CVA requirement under the advanced
approach is calculated on the basis of anticipated positive exposures on OTC derivatives
transactions vis-à-vis "Financial institutions" counterparties excluding intragroup
transactions. Under this scope, the system used to estimate the capital requirements
is the same as the one used to calculate the market VaR for the specific interest
rate risk.
► Capital requirement
with regard to credit valuation adjustment (CVA) at 31 December
2018 and 31 December 2017 (CCR2)
|
|
31.12.2018 |
31.12.2017 |
| € million |
EAD post-CRM |
RWA |
EAD post-CRM |
RWA |
| 1 Total portfolios subject to the Advanced CVA capital
charge |
15,852 |
2,510 |
16,122 |
1,907 |
| 2 (i) VaR component (including the 3xmultiplier) |
|
22 |
|
18 |
| 3 (ii) Stressed VaR component (including the 3xmultiplier) |
|
179 |
|
135 |
| 4 All portfolios subject to the Standardised CVA capital
charge |
16,641 |
618 |
8,603 |
356 |
| EU4 Based on the original exposure method |
|
|
|
|
| 5 Total subject to the CVA capital charge |
32,493 |
3,128 |
24,725 |
2,262 |
3.4.2.5 CREDIT
AND COUNTERPARTY RISK MITIGATION TECHNIQUES
Definitions:
| ― |
collateral: a security interest giving the Bank the right to
liquidate, keep or obtain
title to certain amounts or assets in the event of default or other specific credit
events affecting the counterparty, thereby reducing the credit risk on an exposure;
|
| ― |
personal guarantee: undertaking by a third party to pay the sum
due in the event of
the counterparty's default or other specific credit events, therefore reducing the
credit risks on an exposure.
|
► Standardised
|
|
31.12.2018 |
|
|
Risk mitigation amount |
| € million |
Total exposure amount |
Personal guarantees and credit
derivatives |
Collateral |
Total collateral |
| Central governments or central banks |
1,160 |
|
|
|
| Institutions |
19,296 |
|
|
|
| Corporates |
27,428 |
580 |
17,132 |
17,712 |
| Total |
47,883 |
580 |
17,132 |
17,712 |
|
|
31.12.2017 |
|
|
Risk mitigation amount |
| € million |
Total exposure amount |
Personal guarantees and credit
derivatives |
Collateral |
Total collateral |
| Central governments or central banks |
1,018 |
|
|
|
| Institutions |
17,417 |
|
|
|
| Corporates |
22,522 |
474 |
13,521 |
13,995 |
| Total |
40,957 |
474 |
13,521 |
13,995 |
► IRB
|
|
31.12.2018 |
|
|
Risk mitigation amount |
| € million |
Total exposure amount |
Personal guarantees and credit
derivatives |
Collateral |
Total collateral |
| Central governments or central banks |
83,286 |
3,493 |
40 |
3,532 |
| Institutions |
67,354 |
2,564 |
556 |
3,120 |
| Corporates |
249,154 |
44,231 |
37,126 |
81,357 |
| Total |
399,794 |
50,288 |
37,722 |
88,009 |
|
|
31.12.2017 |
|
|
Risk mitigation amount |
| € million |
Total exposure amount |
Personal guarantees and credit
derivatives |
Collateral |
Total collateral |
| Central governments or central banks |
67,664 |
2,580 |
11 |
2,592 |
| Institutions |
72,285 |
662 |
1,346 |
2,008 |
| Corporates |
229,504 |
38,410 |
38,029 |
76,439 |
| Total |
369,453 |
41,652 |
39,386 |
81,038 |
3.4.2.6 CREDIT
RISK MITIGATION TECHNIQUES
♦ Collateral management
system
The main categories of collateral taken by the Bank are described under "Risk management
- Credit Risk - Collateral and Guarantees Received".
When a credit is granted, collateral is analysed specifically to assess the value
of the asset, its liquidity, volatility and the correlation between the value of the
collateral and the quality of the counterparty financed. Regardless of collateral
quality, the first criterion in the lending decision is always the borrower's ability
to repay sums due from cash flow generated by its operating activities, except for
specific trade finance transactions.
For financial collateral, a minimum exposure coverage ratio is usually included
in
loan contracts, with readjustment clauses. Financial collateral is revalued according
to the frequency of margin calls and the variability of the underlying value of the
financial assets transferred as collateral or quarterly, as a minimum.
The minimum coverage ratio (or the haircut applied to the value of the collateral
under Basel II) is determined by measuring the pseudo-maximum deviation of the value
of the securities on the revaluation date. This measurement is calculated with a 99%
confidence interval over a time horizon covering the period between each revaluation,
the period between the default date and the date on which asset liquidation starts,
and the duration of the liquidation period. This haircut also applies for currency
mismatch risk when the securities and the collateralised exposure are denominated
in different currencies. Additional haircuts are applied when the size of the stock
position necessitates a block sale or when the borrower and the issuer of the collateral
securities belong to the same risk group.
Other types of asset may also be pledged as non recourse financial assets. This
is
notably the case for certain activities such as asset financing for aircrafts, shipping,
real estate or commodities.
INSURANCE PROVIDERS
Two main types of guarantee are generally used (excluding intragroup guarantees):
| ― |
export credit insurance taken out by the Bank;
|
| ― |
unconditional payment guarantees.
|
The main personal guarantee providers (excluding credit derivatives) are export
credit
agencies, most of which fall under sovereign risk and have an investment grade rating.
The major ones are BPI (France), Sace S.p.A. (Italy), Euler Hermes (Germany) and Korea
Export Insurance (Korea).
► Financial health
of export credit agencies - Available ratings of rating agencies
|
|
31.12.2018 |
|
|
Moody's |
Standard & Poor's |
Fitch Ratings |
|
|
Long term rating [outlook] |
Long term rating [outlook] |
Long term rating [outlook] |
| Bpifrance Financement |
Aa2 [stable] |
Unrated |
(1) AA [stable]
|
| Euler Hermes S.A. |
Aa3 [stable] |
AA [stable] |
Unrated |
| Sace S.p.A. |
Unrated |
Unrated |
BBB+ [stable] |
(1)
Rating given to EPIC Bpifrance.
♦ Credit derivatives
used for hedging at 31 December 2018
Credit derivatives used for hedging purposes are described under "Risk management
- Credit Risk - Use of Credit Derivatives",
► Exposures to
credit derivatives (CCR6)
|
|
31.12.2018 |
|
|
Credit derivative
hedges |
|
| € million |
Protection bought |
Protection sold |
Other credit derivatives |
| Notionals |
|
|
|
| Single-name credit default swaps |
3,727 |
|
|
| Index credit default swaps |
|
|
|
| Total return swaps |
|
|
|
| Credit options |
|
|
|
| Other credit derivatives |
|
|
|
| Total notionals |
3,727 |
|
|
| Fair values |
|
|
|
| Positive fair value (asset) |
107 |
|
|
| Negative fair value (liability) |
(4) |
|
|
3.4.2.7 SECURITISATION
TRANSACTIONS
The credit risk on securitisation transactions is presented in the Securitisation
chapter below.
3.4.2.8 EQUITY
EXPOSURES IN THE BANKING BOOK
Equity investments owned by Crédit Agricole CIB Group outside the trading book
are
made up of securities "that give residual and subordinated rights to the assets or
income of the issuer or that are of a similar economic nature".
It mainly concerns:
| ― |
listed and non-listed shares and units in investment funds;
|
| ― |
implicit options in bonds that are convertible, redeemable or
exchangeable for shares;
|
| ― |
options on shares;
|
| ― |
deeply subordinated securities.
|
The objective pursued in the context of non-consolidated equity investments is
the
management intention (financial assets at fair value through profit/loss or on option,
financial assets available for sale, investments held until maturity, loans and receivables)
as described in note 1.3 to the financial statements "Accounting methods and principles".
The accounting techniques and valuation methods used are described in note 1.3
to
the financial statements "Accounting policies and principles".
► Internal ratings
- Amount of gross exposures and exposure at default using the internal
rating method as of 31 December 2018 (CR10)
|
|
31.12.2018 |
|
|
Categories |
| € million |
On-balance sheet amount |
Off-balance sheet amount |
Risk weight |
Exposure amount |
RWAs |
Capital requirements |
| Exchange-traded equity exposures |
1 |
|
190% |
1 |
2 |
|
| Private equity exposures |
4 |
|
290% |
4 |
13 |
1 |
| Other equity exposures |
285 |
|
370% |
285 |
1,053 |
84 |
| Total |
290 |
|
|
290 |
1,068 |
85 |
► Internal ratings
- Amount of gross exposures and exposure at default using the internal
rating method as of 31 December 2017 (CR10)
|
|
31.12.2017 |
|
|
Categories |
| € million |
On-balance sheet amount |
Off-balance sheet amount |
Risk weight |
Exposure amount |
RWAs |
Capital requirements |
| Exchange-traded equity exposures |
11 |
|
190.00% |
3 |
7 |
1 |
| Private equity exposures |
7 |
|
290.00% |
7 |
20 |
2 |
| Other equity exposures |
358 |
|
370.00% |
251 |
929 |
74 |
| Total |
376 |
|
|
262 |
956 |
76 |
Equity exposures using the internal rating method mainly reflects securities portfolio
non consolidated. Their total amount in Crédit Agricole CIB's balance sheet is €290
million at 31 December 2018 compared to €376 million at 31 December 2017.
3.4.3 Securitisation
3.4.3.1 DEFINITIONS
OF SECURITISATION TRANSACTIONS
Crédit Agricole CIB Group carries out securitisation transactions as an originator,
sponsor or investor in accordance with the Basel III criteria.
The securitisation transactions listed below are transactions as defined in Directive
2013/36/EU (CRD 4) and Regulation (EU) 575/2013 of 26 June 2013 (CRR), in force as
from 1 January 2014. The directive and regulations incorporate into European law the
international Basel III reforms (issued in December 2010) introducing, among other
things, new requirements for bank solvency and oversight of liquidity risk. These
texts are supplemented by the regulation (EU) 2017/2402 from the European Parliament
and Council of 12 December 2017, creating a general framework for securitisation and
a specific framework for simple, transparent and standardised securitisation, and
regulation 2017/2401 modifies the applicable calculation securitisations formulae
for the solvency ratio. They cover transactions or structures under which the credit
risk associated with an exposure or pool of exposures is sub-divided into tranches
and which have the following features:
| ― |
payments made as part of the transaction or the structure depend
on the performance
of the exposure or the basket of exposures;
|
| ― |
the subordination of tranches determines how losses are allocated
over the life of
the transaction or structure.
|
Securitisation transactions include:
| ― |
conventional securitisation: securitisation involving the transfer
of the economic
interest of the securitised exposures through the transfer of ownership of these exposures
from the initiator to a securitisation entity or through a sub-compartment of a securitisation
entity, in which the securities issued do not represent payment obligations for the
initiator;
|
| ― |
synthetic securitisations: a securitisation in which the transfer
of risk is done
via the use of credit derivatives or guarantees and in which the securitised exposures
remain exposures for the initiator.
|
The Crédit Agricole CIB securitisation exposures detailed below cover all securitisation
exposures (recognised on or off-balance sheet) that generate risk-weighted assets
(RWA) and capital requirements with respect to the Group's regulatory capital portfolio,
according to the following typologies:
| ― |
the securitisation exposures for which the Group is considered
to be the originator;
|
| ― |
positions in which the Group is an investor;
|
| ― |
positions in which the Group is a sponsor;
|
| ― |
securitisation swap positions (currency or interest rate hedges)
made on behalf of
securitisation vehicles.
|
It should be noted that most securitisation transactions on behalf of European
customers
involve Ester Finance Titrisation, a wholly owned credit institution subsidiary of
Crédit Agricole CIB, which finances the purchase of receivables as both sponsor and,
through Ester Finance Titrisation, originator of these securitisation transactions.
3.4.3.2 PURPOSE
AND STRATEGY
♦ 3.4.3.2.1 Proprietary
securitisation activities
Crédit Agricole CIB's activities to transfer risk through proprietary securitisation
are as follows:
ACTIVE MANAGEMENT
OF THE FINANCING PORTFOLIO
In addition to the use of credit derivatives (see "Risk factors and Pillar 3",
section
Credit risks - Used of credit derivatives), this activity consists of using securitisation
to manage the credit risk in the corporate financing portfolio, optimising the allocation
of equity, reducing the concentration of outstanding loans to corporates, freeing
up resources to contribute to the renewal of the banking portfolio (in the framework
of the Distribute to Originate model) and optimising the profitability of shareholders'
funds. This activity is managed by the Execution Management teams within the Financial
Department of Crédit Agricole CIB. The supervisory formula approach is used to calculate
the weighted exposures on proprietary securitisations. In this activity, the Bank
does not systematically purchase insurance on all tranches, as the management goal
is to cover some of the most risky financing portfolio tranches whilst keeping part
of the overall risk.
NEW SECURITISATIONS
CARRIED OUT BY CRÉDIT AGRICOLE CIB IN 2018
In the context of managing the financing portfolio, the Execution Management teams
set up a synthetic securitisation transaction of a portfolio of $2 billion of assets
in international trade and in emerging countries in March 2018, with the IFC of the
World Bank group, replacing a securitisation of the same type that matured in 2017.
In this transaction, Crédit Agricole CIB undertakes to reallocate the capital released
of $510 million in new social financings in the emerging countries, and in accordance
with the 2017 Social Bonds Principles. Also, the Execution Management Team set up
a second synthetic securitisation transaction at the end of October 2018, on a portfolio
of €2 billion in assets from another business line of Crédit Agricole CIB, with a
private investor. This transaction is secured by cash collateral equal to the amount
of the risk guaranteed.
♦ 3.4.3.2.2 Securitisation
transactions carried out on behalf of customers as arranger/
sponsor, intermediary or originator
Securitisation transactions on behalf of customers within Global Markets activities
allow Crédit Agricole CIB to raise funds or manage a risk exposure on behalf of its
customers. When carrying out these activities, Crédit Agricole CIB can act as an originator,
sponsor/ arranger or investor:
| ― |
as a sponsor/arranger, Crédit Agricole CIB structures and manages
securitisation programmes
that refinance assets of the Bank's customers, mainly via Asset Backed Commercial
Paper (ABCP) conduits, namely LMA in Europe, Atlantic and La Fayette in the United
States, and ITU in Brazil. These specific entities are protected against the bankruptcy
of Crédit Agricole CIB, but have been consolidated by the Group since the entry into
force of IFRS 10 on 1 January 2014. The liquidity facilities protect investors from
credit risk and guarantee the liquidity of the conduits;
|
| ― |
as an investor, the Group invests directly in certain securitisation
exposures and
is a liquidity provider or counterparty of derivative exposures (currency or interest
rate swaps for example);
|
| ― |
as an arranger, sponsor or originator, Crédit Agricole CIB carries
out securitisation
transactions on behalf of its customers. At 31 December 2018, there were four active
consolidated multiseller vehicles (LMA, Atlantic, La Fayette and ITU), structured
by the Group on behalf of third parties. LMA, Atlantic, La Fayette and ITU are ABCP
fully supported programmes. This ABCP conduits activity finances the working capital
requirements of some of the Group's customers by backing short-term financing with
traditional assets, such as commercial or financial receivables. The amount of the
assets held by these vehicles and financed through the issuance of marketable securities
amounted to €24 billion at 31 December 2018 (€24 billion at 31 December 2017).
|
The default risk on the assets held by these vehicles is borne by the sellers of
the
underlying receivables through credit enhancements or by insurers for certain types
of risk, upstream of the ABCP transactions, for which Crédit Agricole CIB bears the
risk through liquidity facilities.
ACTIVITIES CARRIED
OUT AS A SPONSOR
The conduits activity was sustained throughout 2018 and the newly securitised outstandings
mainly relate to commercial and financial loans.
It should be noted that for part of this conduits activity, Crédit Agricole CIB
acts
as the originator insofar as the structures involve the entity Ester Finance Titrisation,
which is a consolidated Group entity.
The amount committed to liquidity facilities granted to LMA, Atlantic, La Fayette
and ITU as sponsor was €32 billion at 31 December 2018 (€32 billion at 31 December
2017).
ACTIVITIES CARRIED
OUT AS AN INVESTOR
As part of its sponsor activities, the Group can grant guarantees and liquidity
facilities
to securitisation vehicles or act as counterparty for derivatives in securitisation
transactions involving special purpose vehicles. These transactions typically involve
currency swaps granted to ABCP conduits and interest rate swaps for certain ABS issues.
These activities are recorded in the banking book as investor activities.
Moreover, Crédit Agricole CIB may be called upon to directly finance on its balance
sheet some securitisation transactions on behalf of its customers (mainly aeronautic
or vehicle fleet financing transactions) or provide support through a liquidity facility
to an issue carried out by special purpose entities not part of the Bank (SPV or ABCP
program not sponsored by the Bank). In this case, Crédit Agricole CIB is deemed to
be an investor. This activity represented a commitment of €2 billion at 31 December
2018 (€2 billion at 31 December 2017).
INTERMEDIATION
TRANSACTIONS
Crédit Agricole CIB participates in the structuring and in the placement of securities
backed by client asset pools and intended to be placed with investors.
In this business, the Bank retains a relatively low risk insofar as it sometimes
contributes
back-up lines to the vehicles that issue the securities or holds a share of the securities
issued.
3.4.3.3 RISK MONITORING
AND RECOGNITION
♦ 3.4.3.3.1 Risk
monitoring
Risk management related to securitisation transactions follows the rules established
by the Group and depends on whether the assets are recognised in the banking book
(credit and counterparty risk) or trading book (market and counterparty risk).
The development, scaling and targeting of securitisation transactions are periodically
reviewed by Portfolio Strategy Committees specific to those activities and the respective
countries, as well as by the Group Risks Committees.
Risks on securitisation transactions are measured against the capacity of the assets
transferred to financing vehicles to generate sufficient flows to cover the costs,
mainly financial, of these vehicles. Crédit Agricole CIB's securitisation exposures
are treated using the IRB-securitisation approach, i.e.:
| ― |
regulatory formula approach: in residual cases where there are
neither public external
ratings nor any possibility of applying the IAA method for exposures with no public
external rating.
|
| ― |
method based on the ratings-based approach (RBA) for exposures
with a public external
rating (directly or inferred) from an agency approved by the Committee of European
Banking Supervisors (CEBS). The external agencies used are Standard & Poor's,
Moody's,
Fitch Ratings and Dominion Bond Rating Services (DBRS);
|
| ― |
internal assessment approach (IAA): the Bank's internal rating
method approved by
the Crédit Agricole S.A. Standards and Methods Committee for the principal asset classes
(including trade receivables and outstanding loans on vehicles) providing that there
is no agency rating for the exposure under consideration.
|
In accordance with the regulations, Crédit Agricole CIB's internal evaluation approaches
replicate the public methods used by external ratings agencies. These contain the
following two elements:
| ― |
a quantitative component that assesses the rate of increase in
transactions compared
to historical performance as well as the potential risk of commingling generated by
the transaction;
|
| ― |
a qualitative component that supplements the quantitative approach
and facilitates
an assessment of, among other things, the quality of the structures or even the reports.
|
The internal rating methods apply to securitisation of trade receivables, auto
loans
and dealer inventory financing.
As regards the stress simulation parameters, these depend on the rating of the
securitisations
and securitised underlyings. For example, for an AA equivalent rating (S&P scale),
the default risk stress simulation parameter is approximately 2.25 for trade receivable
transactions, generally 3 for automobile loan securitisations, and dealer inventory
financing securitisations, the credit stress simulation is composed of several elements
including a degradation of three ratings on the car manufacturer's rating.
It should be noted that beyond the needs of prudential calculations, the internal
ratings are used as part of the origination process to assess the profitability of
transactions.
Lastly, concerning the internal models framework, an independent unit within the
Crédit
Agricole Group is tasked with the validation of the internal methodologies. In addition,
regular audits are conducted by the Group Control and Audit Department to ensure the
relevance of the internal methodologies. Backtesting and stress test exercises are
also regularly implemented by the modelling teams;
These ratings include all the types of risk implied by securitisation transactions:
intrinsic risks on loans and receivables (insolvency of the borrower, payment delays,
dilution, offsetting of receivables) or risks on the structuring of transactions (legal
risks, risks related to the settlement channels for loans and receivables, risks related
to the quality of the information periodically supplied by the administrator of transferred
loans and receivables, other risks related to the transferor, etc.).
These critically examined ratings are only a tool for making decisions pertaining
to these transactions; such decisions are taken by Credit Committees at various levels.
From 01/01/2019, a new regulation covering securitisation is applicable. It provides
for a change in the hierarchy of approaches to calculating RWA, and an increase in
weightings.
The implementation of this new regulation was finalised in the bank's rating tools.
Credit decisions impose on the transactions, which are reviewed at least on an
annual
basis by these same committees, different limits as the acquired portfolio changes
(levels for late payments, losses, concentration by sector or geographic area, dilution
of loans and receivables or the periodic valuation of assets by independent experts,
etc.) the non-respect of which may result in a tightening of the structure or the
early amortisation of the transaction.
These credit decisions also include, in liaison with the Bank's other Credit Committees,
an assessment focusing on the risk generated by the recipients of the receivables
and the possibility of substituting the manager by a new one in the event of mismanagement
of those receivables.
Like all credit decisions, these decisions include aspects of compliance and "country
risk".
On 31 December 2018, the entity Ester Finance Titrisation had impaired receivables
of €383.9 million and impairments of €38.9 million. Net of impairments, the total
amount of securitised assets within this entity was €17.1 billion.
The liquidity risk associated with securitisation activities is monitored by the
business
lines in charge, but also centrally by the Market Risks Department and the Control
Department. The impact of these activities is incorporated into the Internal Liquidity
Model indicators mainly the stress scenarios, liquidity ratios and liquidity gaps.
The management of liquidity risk at Crédit Agricole CIB is described in more detail
in the paragraph "Liquidity and financing risk" of the Risk Factors part of this section.
The management of foreign exchange risk with respect to securitisation activities
is not different from that of the Group's other assets. As regards interest rate risk
management, securitised assets are refinanced through special purpose vehicles according
to rules for matching interest rates closely to those of the other assets. For assets
of discontinuing activities, each transfer of position is first approved by Crédit
Agricole CIB's Market Risk Department.
♦ 3.4.3.3.2 Accounting
policies
As part of securitisation transactions, Crédit Agricole CIB carries out a derecognition
test with regard to IFRS 9 (the criteria for which are listed in Note 1.3 on accounting
policies and principles of the consolidated financial statements).
In the case of synthetic securitisations, the assets are not derecognised, as they
remain under the control of the institution. The assets continue to be recognised
according to their original classification and valuation method (see Note 1.3 on Accounting
policies and principles of the consolidated financial statements for the classification
and valuation of financial assets).
Moreover, investments in securitisation instruments (cash or synthetic) are recognised
on the basis of their classification and their associated valuation (see Note 1.3
on Accounting policies and principles of the consolidated financial statements for
the classification and valuation of financial assets).
Securitisation positions can be classified into the following accounting categories:
| ― |
"financial assets at amortised cost": these securitisation exposures
are measured
following initial recognition at amortised cost based on the effective interest rate
and may, if necessary, be impaired;
|
| ― |
"financial assets at fair value through comprehensive income
that may be reclassified
to profit or loss": these securitisation exposures are remeasured at their fair value
on the closing date and the variances in fair value are recognised in gains (losses)
accounted in other comprehensive income that may be reclassified to profit or loss;
|
| ― |
"financial assets at fair value through profit or loss": these
securitisation exposures
are remeasured at fair value on the closing date and any changes in fair value are
recognised through profit or loss under "Net gains/(losses) on financial instruments
at fair value through profit or loss".
|
Gains on disposals of securitisation positions are recognised to profit/loss in
accordance
with the rules for the original category of the positions sold.
3.4.3.4 2018 ACTIVITY
SUMMARY
Crédit Agricole CIB's securitisation activity in 2018 was marked by:
| ― |
support for the development of the public ABS market in the United
States and in Europe.
Crédit Agricole CIB structured and organised the placement (as arranger and bookrunner)
of a significant number of primary ABS issues on behalf of its large "Financial Institutions"
customers, notably in the automobile and consumer finance sectors;
|
| ― |
in the ABCP conduits market, Crédit Agricole CIB maintained its
position amongst the
leaders in both the European and US markets. It renewed and initiated new securitisation
transactions involving commercial and financial receivables on behalf of its customers,
mostly corporates, while ensuring a favourable risk profile borne by the Bank. Crédit
Agricole CIB's strategy of focusing on customer financing is appreciated by investors
and is reflected in still competitive financing terms.
|
At 31 December 2018, Crédit Agricole CIB did not have any early-redemption securitisation
transactions. Nor did it provide implicit support for any Crédit Agricole securitisation
programmes in 2018.
3.4.3.5 EXPOSURES
♦ 3.4.3.5.1 Exposure
at default of securitisation transactions in the banking book
that generate RWA
► Securitisation
exposures in IRB and STD banking book (SEC1)
|
|
31.12.2018 |
|
|
Bank acts as originator |
Bank acts as sponsor |
| € million |
Traditional |
Synthetic |
Sub-total |
Traditional |
Synthetic |
Sub-total |
| 1 Securitisation |
14,649 |
7,478 |
22,127 |
21,066 |
|
21,066 |
| 2 Residential real estate loans |
|
|
|
41 |
|
41 |
| 3 Commercial real estate loans |
|
|
|
15 |
|
15 |
| 4 Credit card loans |
|
|
|
74 |
|
74 |
| 5 Leasing |
|
|
|
3,112 |
|
3,112 |
| 6 Loans to corporates and SMEs |
|
6,177 |
6,177 |
|
|
|
| 7 Personal loans |
150 |
|
150 |
4,008 |
|
4,008 |
| 8 Trade receivables |
14,499 |
|
14,499 |
7,390 |
|
7,390 |
| 9 Other |
|
1,301 |
1,301 |
6,425 |
|
6,425 |
| 10 Re-securitisation |
1,298 |
7 |
1,305 |
|
|
|
| 11 Total 31.12.2018 |
15,947 |
7,485 |
23,432 |
21,066 |
|
21,066 |
| Total 31.12.2017 |
13,289 |
4,096 |
17,385 |
21,290 |
|
21,290 |
|
|
31.12.2018 |
|
|
Bank acts as sponsor |
Banks acts as investor |
| € million |
Traditional |
Synthetic |
Sub-total |
| 1 Securitisation |
809 |
|
809 |
| 2 Residential real estate loans |
5 |
|
5 |
| 3 Commercial real estate loans |
|
|
|
| 4 Credit card loans |
|
|
|
| 5 Leasing |
12 |
|
12 |
| 6 Loans to corporates and SMEs |
404 |
|
404 |
| 7 Personal loans |
57 |
|
57 |
| 8 Trade receivables |
121 |
|
121 |
| 9 Other |
210 |
|
210 |
| 10 Re-securitisation |
|
|
|
| 11 Total 31.12.2018 |
809 |
|
809 |
| Total 31.12.2017 |
1,412 |
3 |
1,416 |
► Exposure at
default of securitisation transactions by weighting method
| € million |
EAD Securities |
| Underlying |
SFA |
IAA |
RBA |
Standard |
Total |
| Securitisation |
9,355 |
29,567 |
3,072 |
2,008 |
44,002 |
| Residential real estate loans |
|
|
46 |
|
46 |
| Commercial real estate loans |
|
|
15 |
|
15 |
| Credit card loans |
|
|
|
74 |
74 |
| Leasing |
|
2,977 |
57 |
91 |
3,125 |
| Loans to corporates and SMEs |
6,177 |
|
404 |
|
6,581 |
| Personal loans |
|
2,875 |
509 |
831 |
4,215 |
| Trade receivables |
197 |
21,672 |
|
140 |
22,009 |
| Other |
2,980 |
2,043 |
2,041 |
872 |
7,936 |
| Re-securitisation |
|
|
1,305 |
|
1,305 |
| Total 31.12.2018 |
9,355 |
29,567 |
4,377 |
2,008 |
45,307 |
| Total 31.12.2017 |
5,949 |
27,675 |
4,852 |
1,616 |
40,091 |
► Exposure at
default of securitisation transactions broken down by accounting classification
on- or off-balance sheet
| € million |
EAD Securities at
31.12.2018 |
| Underlying |
On balance sheet |
Off balance sheet |
Total |
| Securitisation |
1,926 |
42,076 |
44,002 |
| Residential real estate loans |
|
46 |
46 |
| Commercial real estate loans |
|
15 |
15 |
| Credit card loans |
48 |
26 |
74 |
| Leasing |
91 |
3,034 |
3,125 |
| Loans to corporates and SMEs |
|
6,581 |
6,581 |
| Personal loans |
782 |
3,434 |
4,215 |
| Trade receivables |
140 |
21,870 |
22,009 |
| Other |
866 |
7,070 |
7,936 |
| Re-securitisation |
1,298 |
7 |
1,305 |
| Total |
3,224 |
42,082 |
45,307 |
► Securitised
exposures in banking book and associated regulatory capital requirements
- Bank acting as IRB and STD issuer or agent (SEC3)
|
|
31.12.2018 |
|
|
Exposure values (by
RW bands) |
Exposure values (by regulatory
approach) |
| € million |
≤ 20% |
>20% to 50% |
>50% to 100% |
>100% to < 1,250% |
1,250% |
IRB RBA (including IAA) |
| 1 Total exposures |
41,283 |
286 |
1,479 |
100 |
1,350 |
31,849 |
| 2 Traditional securitisation |
33,848 |
286 |
1,479 |
100 |
1,301 |
31,849 |
| 3 Of which securitisation |
33,848 |
286 |
1,479 |
100 |
3 |
31,849 |
| 4 Of which retail underlying |
3,453 |
70 |
650 |
100 |
|
3,381 |
| 5 Of which wholesale |
30,395 |
216 |
828 |
|
3 |
28,468 |
| 6 Of which resecuritisation |
|
|
|
|
1,298 |
|
| 7 Of which senior |
|
|
|
|
1,298 |
|
| 8 Of which non-senior |
|
|
|
|
|
|
| 9 Synthetic securitisation |
7,435 |
|
|
|
49 |
|
| 10 Of which securitisation |
7,435 |
|
|
|
43 |
|
| 11 Of which retail underlying |
|
|
|
|
|
|
| 12 Of which wholesale |
7,435 |
|
|
|
43 |
|
| 13 Of which resecuritisation |
|
|
|
|
7 |
|
| 14 Of which senior |
|
|
|
|
7 |
|
| 15 of which non-senior |
|
|
|
|
|
|
|
|
31.12.2018 |
|
|
Exposure values (by
regulatory approach) |
RWA (by regulatory
approach) |
| € million |
IRB SFA |
SA/SSFA |
1,250% |
IRB RBA (including IAA) |
IRB SFA |
SA/SSFA |
| 1 Total exposures |
9,303 |
1,995 |
1,350 |
3,127 |
706 |
1,429 |
| 2 Traditional securitisation |
1,868 |
1,995 |
1,301 |
3,127 |
186 |
1,429 |
| 3 Of which securitisation |
1,868 |
1,995 |
3 |
3,127 |
186 |
1,429 |
| 4 Of which retail underlying |
|
892 |
|
264 |
|
722 |
| 5 Of which wholesale |
1,868 |
1,103 |
3 |
2,862 |
186 |
707 |
| 6 Of which resecuritisation |
|
|
1,298 |
|
|
|
| 7 Of which senior |
|
|
1,298 |
|
|
|
| 8 Of which non-senior |
|
|
|
|
|
|
| 9 Synthetic securitisation |
7,435 |
|
49 |
|
520 |
|
| 10 Of which securitisation |
7,435 |
|
43 |
|
520 |
|
| 11 Of which retail underlying |
|
|
|
|
|
|
| 12 Of which wholesale |
7,435 |
|
43 |
|
520 |
|
| 13 Of which resecuritisation |
|
|
7 |
|
|
|
| 14 Of which senior |
|
|
7 |
|
|
|
| 15 of which non-senior |
|
|
|
|
|
|
|
|
31.12.2018 |
|
|
RWA (by regulatory approach) |
Capital charge after
cap |
| € million |
1,250% |
IRB RBA (including IAA) |
IRB SFA |
SA/SSFA |
1,250% |
| 1 Total exposures |
758 |
250 |
57 |
114 |
61 |
| 2 Traditional securitisation |
314 |
250 |
15 |
114 |
25 |
| 3 Of which securitisation |
34 |
250 |
15 |
114 |
3 |
| 4 Of which retail underlying |
|
21 |
|
58 |
|
| 5 Of which wholesale |
34 |
229 |
15 |
57 |
3 |
| 6 Of which resecuritisation |
280 |
|
|
|
22 |
| 7 Of which senior |
280 |
|
|
|
22 |
| 8 Of which non-senior |
|
|
|
|
|
| 9 Synthetic securitisation |
445 |
|
42 |
|
36 |
| 10 Of which securitisation |
444 |
|
42 |
|
36 |
| 11 Of which retail underlying |
|
|
|
|
|
| 12 Of which wholesale |
444 |
|
42 |
|
36 |
| 13 Of which resecuritisation |
1 |
|
|
|
|
| 14 Of which senior |
1 |
|
|
|
|
| 15 of which non-senior |
|
|
|
|
|
► Securitised
exposures in banking book and associated regulatory capital requirements
- Bank acting as IRB and STD investor (SEC4)
|
|
31.12.2018 |
|
|
Exposure values (by
RW bands) |
Exposure values (by regulatory
approach) |
| € million |
≤ 20% |
>20% to 50% |
>50% to 100% |
>100% to < 1,250% |
1,250% |
IRB RBA (including IAA) |
| 1 Total exposures |
365 |
3 |
441 |
|
|
787 |
| 2 Traditional securitisation |
365 |
3 |
441 |
|
|
787 |
| 3 Of which securitisation |
365 |
3 |
441 |
|
|
787 |
| 4 Of which retail underlying |
49 |
|
13 |
|
|
49 |
| 5 Of which wholesale |
316 |
3 |
428 |
|
|
738 |
| 6 Of which resecuritisation |
|
|
|
|
|
|
| 7 Of which senior |
|
|
|
|
|
|
| 8 Of which non-senior |
|
|
|
|
|
|
| 9 Synthetic securitisation |
|
|
|
|
|
|
| 10 Of which securitisation |
|
|
|
|
|
|
| 11 Of which retail underlying |
|
|
|
|
|
|
| 12 Of which wholesale |
|
|
|
|
|
|
| 13 Of which resecuritisation |
|
|
|
|
|
|
| 14 Of which senior |
|
|
|
|
|
|
| 15 of which non-senior |
|
|
|
|
|
|
|
|
31.12.2018 |
|
|
Exposure values (by
regulatory approach) |
RWA (by regulatory
approach) |
| € million |
IRB SFA |
SA/SSFA |
1,250% |
IRB RBA (including IAA) |
IRB SFA |
SA/SSFA |
| 1 Total exposures |
9 |
13 |
|
358 |
1 |
10 |
| 2 Traditional securitisation |
9 |
13 |
|
358 |
1 |
10 |
| 3 Of which securitisation |
9 |
13 |
|
358 |
1 |
10 |
| 4 Of which retail underlying |
|
13 |
|
4 |
|
10 |
| 5 Of which wholesale |
9 |
|
|
354 |
1 |
|
| 6 Of which resecuritisation |
|
|
|
|
|
|
| 7 Of which senior |
|
|
|
|
|
|
| 8 Of which non-senior |
|
|
|
|
|
|
| 9 Synthetic securitisation |
|
|
|
|
|
|
| 10 Of which securitisation |
|
|
|
|
|
|
| 11 Of which retail underlying |
|
|
|
|
|
|
| 12 Of which wholesale |
|
|
|
|
|
|
| 13 Of which resecuritisation |
|
|
|
|
|
|
| 14 Of which senior |
|
|
|
|
|
|
| 15 of which non-senior |
|
|
|
|
|
|
|
|
31.12.2018 |
|
|
RWA (by regulatory approach) |
Capital charge after
cap |
| € million |
1,250% |
IRB RBA (including IAA) |
IRB SFA |
SA/SSFA |
1,250% |
| 1 Total exposures |
4 |
29 |
|
1 |
|
| 2 Traditional securitisation |
4 |
29 |
|
1 |
|
| 3 Of which securitisation |
4 |
29 |
|
1 |
|
| 4 Of which retail underlying |
|
|
|
1 |
|
| 5 Of which wholesale |
4 |
28 |
|
|
|
| 6 Of which resecuritisation |
|
|
|
|
|
| 7 Of which senior |
|
|
|
|
|
| 8 Of which non-senior |
|
|
|
|
|
| 9 Synthetic securitisation |
|
|
|
|
|
| 10 Of which securitisation |
|
|
|
|
|
| 11 Of which retail underlying |
|
|
|
|
|
| 12 Of which wholesale |
|
|
|
|
|
| 13 Of which resecuritisation |
|
|
|
|
|
| 14 Of which senior |
|
|
|
|
|
| 15 of which non-senior |
|
|
|
|
|
♦ 3.4.3.5.2 Exposure
at default of securitisation transactions in the trading book
that generate RWA
EXPOSURE AT DEFAULT
OF SECURITISATION TRANSACTIONS BY ROLE
► Securitisation
exposures in trading book (SEC2)
|
|
31.12.2018 |
|
|
Bank acts as originator |
Bank acts as sponsor |
| € million |
Sub-total |
Traditional |
Synthetic |
Sub-total |
Traditional |
Synthetic |
| 1 Securitisation |
|
|
|
|
|
|
| 2 Residential real estate loans |
|
|
|
|
|
|
| 3 Commercial real estate loans |
|
|
|
|
|
|
| 4 Credit card loans |
|
|
|
|
|
|
| 5 Leasing |
|
|
|
|
|
|
| 6 Loans to corporates and SMEs |
|
|
|
|
|
|
| 7 Personal loans |
|
|
|
|
|
|
| 8 Trade receivables |
|
|
|
|
|
|
| 9 Other |
|
|
|
|
|
|
| 10 Re-securitisation |
|
|
|
|
|
|
| 11 Total 31.12.2018 |
|
|
|
|
|
|
| Total 31.12.2017 |
|
|
|
|
|
|
|
|
31.12.2018 |
|
|
Bank acts as sponsor |
Banks acts as investor |
| € million |
Sub-total |
Synthetic |
Sub-total |
| 1 Securitisation |
201 |
|
201 |
| 2 Residential real estate loans |
|
|
|
| 3 Commercial real estate loans |
|
|
|
| 4 Credit card loans |
|
|
|
| 5 Leasing |
|
|
|
| 6 Loans to corporates and SMEs |
|
|
|
| 7 Personal loans |
|
|
|
| 8 Trade receivables |
|
|
|
| 9 Other |
201 |
|
201 |
| 10 Re-securitisation |
24 |
|
24 |
| 11 Total 31.12.2018 |
226 |
|
226 |
| Total 31.12.2017 |
96 |
|
96 |
SECURITISATION
EXPOSURES RETAINED OR ACQUIRED IN THE TRADING BOOK BY APPROACH AND
BY WEIGHTING
► Securitisation
exposures retained or acquired in the trading book by approach and
by weighting
| € million |
31.12.2018 |
31.12.2017 |
| Risk weighting tranche |
Long Positions |
Short Positions |
Capital requirement |
Long Positions |
Short Positions |
Capital requirement |
| EAD subject to weighting |
|
|
|
|
|
|
| 7-10% weightings |
60 |
|
|
35 |
|
|
| 12-18% weightings |
113 |
|
|
|
|
|
| 20-35% weightings |
29 |
|
|
5 |
|
|
| 40-75% weightings |
|
|
|
|
|
|
| 100% weightings |
|
|
|
4 |
|
|
| 150% weightings |
|
|
|
|
|
|
| 200% weightings |
|
|
|
4 |
|
|
| 225% weightings |
|
|
|
|
|
|
| 250% weightings |
|
|
|
|
|
|
| 300% weightings |
|
|
|
|
|
|
| 350% weightings |
|
|
|
|
|
|
| 420% weightings |
|
|
|
4 |
|
|
| 500% weightings |
|
|
|
|
|
|
| 650% weightings |
|
|
|
|
|
|
| 750% weightings |
|
|
|
|
|
|
| 850% weightings |
|
|
|
|
|
|
| 1,250% weightings |
24 |
|
5 |
45 |
|
7 |
| Internal valuation approach |
226 |
|
5 |
96 |
|
8 |
| Supervisory Formula Approach |
|
|
|
|
|
|
| Transparency Approach |
|
|
|
|
|
|
| Net total of deductions of equity |
|
|
|
|
|
|
| 1,250% / Positions deducted from capital |
|
|
|
|
|
|
| Total trading portfolio |
226 |
|
5 |
96 |
|
8 |
CAPITAL REQUIREMENTS
RELATIVE TO SECURITISATIONS HELD OR ACQUIRED IN THE TRADING BOOK
► Capital requirements
relative to securitisations held or acquired in the trading
book
|
|
31.12.2018 |
| € million |
Long Positions |
Short Positions |
Total weighted positions |
Capital requirement |
| Weighted EAD |
226 |
|
(26) |
5 |
| Securitisation |
201 |
|
(2) |
1 |
| Resecuritisation |
24 |
|
(24) |
4 |
| Deductions |
|
|
|
|
|
|
31.12.2017 |
| € million |
Long Positions |
Short Positions |
Total weighted positions |
Capital requirement |
| Weighted EAD |
(96) |
|
(48) |
(8) |
| Securitisation |
(65) |
|
(17) |
(3) |
| Resecuritisation |
(31) |
|
(31) |
(5) |
| Deductions |
|
|
|
|
3.4.4 Market risks
3.4.4.1 METHODOLOGY
FOR MEASURING AND SUPERVISING MARKET RISKS IN INTERNAL MODELS
The methodologies for measuring and supervising market risks in internal models
are
described in the part "Risk management - Market risks - Methodology for measuring
and supervising market risks".
3.4.4.2 RULES
AND PROCEDURES FOR VALUING THE TRADING BOOK
The rules for valuing the various items in the trading book are presented in Note
1.3 "Accounting policies and principles" of the notes to the financial statements.
The valuation models are subject to a periodic examination as described in the
part
"Risk management - Market risks -Methodology for measuring and supervising market
risks".
3.4.4.3 METHODOLOGY
FOR MEASURING AND CONTROLLING MARKET RISK UNDER THE STANDARD AND
INTERNAL MODELS APPROACHES
♦ 3.4.4.3.1 Risk
weighted assets using the standard method
► Risk weighted
assets using the standard method (MR1)
|
|
31.12.2018 |
31.12.2017 |
| € million |
RWA |
Capital requirement |
RWA |
Capital requirement |
| Futures and forwards |
1,247 |
100 |
5,026 |
402 |
| Interest rate risk (general and specific) |
136 |
11 |
115 |
9 |
| Risk on shares (general and specific) |
|
|
|
|
| Currency risk |
1,108 |
89 |
4,911 |
393 |
| Commodities risk |
4 |
|
|
|
| Options |
31 |
2 |
24 |
2 |
| Simplificated approach |
|
|
|
|
| Delta-plus method |
|
|
|
|
| Scenarios based approach |
31 |
2 |
24 |
2 |
| Securitisation |
68 |
5 |
95 |
8 |
| Total |
1,346 |
108 |
5,145 |
412 |
♦ 3.4.4.3.2 Exposures
using the internal model approach
RISK WEIGHTED
ASSETS AND CAPITAL REQUIREMENT
► Market risk
in the internal model approach (MR2-A)
|
|
31.12.2018 |
31.12.2017 |
| € million |
RWA |
Capital requirement |
RWA |
Capital requirement |
| 1 VaR (higher of values a and b) |
798 |
64 |
1,056 |
84 |
| (a) Previous day's VaR (VaRt-1) |
|
14 |
|
17 |
| (b) Average of the daily VaR on each of the preceding
sixty business days (VaRavg)
x multiplication factor (mc)
|
|
64 |
|
84 |
| 2 SVaR (higher of values a and b) |
3,121 |
250 |
2,523 |
202 |
| (a) Latest SVaR (sVaRt-1) |
|
59 |
|
44 |
| (b) Average of the SVaR during the preceding sixty business
days (sVaRavg) X multiplication
factor (ms)
|
|
250 |
|
202 |
| 3 Incremental risk charge -IRC (higher of values a and
b) |
2,502 |
200 |
2,152 |
172 |
| (a) Most recent IRC value (incremental default and migration
risks (section 3 calculated) |
|
193 |
|
114 |
| (b) Average of the IRC number over the preceding 12 weeks |
|
200 |
|
172 |
| 4 Comprehensive Risk Measure - CRM (higher of values
a, b and c) |
|
|
|
|
| (a) Most recent risk number for the correlation trading
portfolio |
|
|
|
|
| (b) Average of the risk number for the correlation trading
portfolio over the preceding
12 weeks
|
|
|
|
|
| (c) Floor level |
|
|
|
|
| 5 Total |
6,421 |
514 |
5,730 |
458 |
VALUES RESULTING
FROM THE USE OF INTERNAL MODELS
► Value of trading
book using the internal model approach (IMA) (MR3)
| € million |
31.12.2018 |
31.12.2017 |
| 1 VaR (10 days, 99%) |
|
|
| 2 Maximum value |
21 |
26 |
| 3 Mean value |
16 |
21 |
| 4 Minimum value |
12 |
16 |
| 5 End of period value |
14 |
17 |
| 6 VaR in stressed period (10 days, 99%) |
|
|
| 7 Maximum value |
78 |
64 |
| 8 Mean value |
62 |
50 |
| 9 Minimum value |
53 |
43 |
| 10 End of period value |
59 |
44 |
| 11 Capital requirement in line with IRC (99,9%) |
|
|
| 12 Maximum value |
236 |
339 |
| 13 Mean value |
154 |
132 |
| 14 Minimum value |
85 |
88 |
| 15 End of period value |
149 |
88 |
| 16 Capital requirement in line with CRM (99,9%) |
|
|
| 17 Maximum value |
|
|
| 18 Mean value |
|
|
| 19 Minimum value |
|
|
| 20 End of period value |
|
|
| 21 Floor (standard measure method) |
|
|
3.4.5 Global interest
rate risk
The type of interest rate risk, the main underlying assumptions adopted and the
frequency
of interest rate risk measurements are described under "Risk management - Global interest
rate risks".
3.4.6 Operational
risks
3.4.6.1 ADVANCED
MEASUREMENT APPROACH FOR CALCULATING CAPITAL
The ACPR has since 1 January 2008 authorised Crédit Agricole CIB Group's main entities
to use the Advanced Measurement Approach (AMA) to calculate their regulatory capital
requirements for operational risk. The Group's other entities use the standardised
approach, in accordance with regulations.
The scope of application of the advanced and standard approaches and a description
of the advanced approach methodology are provided under "Risk management - Operational
risks - Methodology".
3.4.6.2 INSURANCE
TECHNIQUES FOR REDUCING OPERATIONAL RISK
The insurance techniques used to reduce operational risk are described under "Risk
management - Operational risks Insurance and risk coverage", page 202.
3.5 ENCUMBERED
ASSETS
Crédit Agricole CIB monitors and manages the level of its assets pledged as collateral.
At 31 December 2018, the ratio of encumbered assets to total assets was 19.19%.
On loans and receivables due from private customers, assets are pledged to obtain
refinancing under advantageous conditions or to constitute reserves that can easily
be made liquid if needed. Crédit Agricole CIB's policy seeks to diversify its refinancing
in order to better withstand liquidity stresses that may affect given markets differently
and to limit the number of assets pledged as collateral in order to conserve high-quality
unencumbered assets that can be easily liquidated through existing channels in the
event of stress.
The other sources of collateral are mainly pledged securities as well as cash (mainly
on margin calls):
| ― |
repos: outstandings of encumbered assets and collateral received
and reused in connection
with repos totalled €78 billion, of which €75 billion in securities received as collateral
and reused (composed of sovereign debt in the proportion of 86%) out of €120 billion
of collateral received;
|
| ― |
margin calls: margin calls represent outstandings of €19 billion,
primarily in connection
with the OTC derivatives activity.
|
► Use of encumbered
assets and collateral received
► Model A - Encumbered
assets and non-encumbered assets
|
|
Carrying amount of
encumbered assets |
Fair value of encumbered
assets |
Carrying amount of
unencumbered assets |
|
|
|
of which notionally eligible EHQLA
and HQLA |
|
of which notionally eligible EHQLA
and HQLA |
|
of which notionally eligible EHQLA
and HQLA |
| € million |
010 |
030 |
040 |
050 |
060 |
080 |
| 010 Assets of the reporting institution |
45,016 |
1,280 |
|
|
458,814 |
44,319 |
| 020 Demand loans |
|
|
|
|
54,325 |
|
| 030 Equity instruments |
1,972 |
|
1,972 |
|
2,568 |
|
| 040 Debt securities |
1,353 |
646 |
1,353 |
646 |
47,034 |
40,535 |
| 050 of which: covered bonds |
|
|
|
|
1,018 |
979 |
| 060 of which: asset-backed securities |
|
|
|
|
2,624 |
1,485 |
| 070 of which: issued by general governments |
654 |
433 |
654 |
433 |
28,888 |
28,608 |
| 080 of which: issued by financial corporations |
415 |
144 |
415 |
144 |
10,269 |
7,877 |
| 090 of which: issued by non-financial corporations |
285 |
69 |
285 |
69 |
4,234 |
1,585 |
| 100 Loans and receivables other than demand loans |
23,084 |
634 |
|
|
233,706 |
3,785 |
| 110 of which: mortgage loans |
|
|
|
|
3,131 |
|
| 120 Other assets |
18,607 |
|
|
|
121,181 |
|
|
|
Fair value of unencumbered
assets |
|
|
|
of which notionally eligible EHQLA
and HQLA |
| € million |
090 |
100 |
| 010 Assets of the reporting institution |
|
|
| 020 Demand loans |
|
|
| 030 Equity instruments |
2,568 |
|
| 040 Debt securities |
47,034 |
40,535 |
| 050 of which: covered bonds |
1,018 |
979 |
| 060 of which: asset-backed securities |
2,624 |
1,485 |
| 070 of which: issued by general governments |
28,888 |
28,608 |
| 080 of which: issued by financial corporations |
10,269 |
7,877 |
| 090 of which: issued by non-financial corporations |
4,234 |
1,585 |
| 100 Loans and receivables other than demand loans |
|
|
| 110 of which: mortgage loans |
|
|
| 120 Other assets |
|
|
► Model B - Sureties
received
|
|
|
|
Unencumbered |
|
|
Fair value of encumbered
collateral received or own debt securities issued |
Fair value of collateral
received or own debt securities issued available for encumbrance |
|
|
|
of which notionally eligible EHQLA
and HQLA |
|
of which notionally eligible EHQLA
and HQLA |
|
|
010 |
030 |
040 |
060 |
| 130 Collateral received by the reporting institution |
75,107 |
62,285 |
47,168 |
34,664 |
| 140 Loans on demand |
|
|
|
|
| 150 Equity instruments |
6 |
|
150 |
|
| 160 Debt securities |
75,101 |
62,285 |
34,667 |
34,664 |
| 170 of which: covered bonds |
|
|
3,109 |
3,109 |
| 180 of which: asset-backed securities |
|
|
1,957 |
1,954 |
| 190 of which: issued by general governments |
64,857 |
58,090 |
21,047 |
21,047 |
| 200 of which: issued by financial corporations |
7,869 |
4,031 |
5,691 |
5,691 |
| 210 of which: issued by non-financial corporations |
2,375 |
164 |
2,863 |
2,863 |
| 220 Loans and advances other than loans on demand |
|
|
|
|
| 230 Other collateral received |
|
|
12,351 |
|
| 240 Own debt securities issued other than own covered
bonds or asset-backed securities |
|
|
|
|
| 250 Total assets, collateral received and own debt securities
issued |
120,123 |
63,565 |
|
|
► Model C - Sources
of expenses encumbering the assets
|
|
Matching liabilities, contingent
liabilities or securities lent |
Assets, collateral received and
own debt securities issued other than covered bonds
and ABSs encumbered
|
|
|
010 |
030 |
| 010 Carrying amount of selected financial liabilities |
202,879 |
120,123 |
| 020 of which: Derivatives |
102,575 |
18,607 |
| 040 of which: Deposits |
100,304 |
101,516 |
| 090 of which: Debt securities issued |
|
|
3.6 LIQUIDITY
COVERAGE RATIO
3.6.1 Quantitative
information
| Scope of consolidation: consolidated |
|
Total unweighted
value (average) |
| € million |
|
31.12.2018 |
30.09.2018 |
30.06.2018 |
31.03.2018 |
| Number of data points used in the calculation of averages |
|
12 |
12 |
12 |
12 |
| High-quality liquid assets |
|
|
|
|
|
| 1 |
Total high-quality liquid assets (HQLA) |
|
|
|
|
| Cash-outflows |
|
|
|
|
|
| 2 |
Retail deposits and deposits from small business customers,
of which: |
10,426 |
10,459 |
10,342 |
10,218 |
| 3 |
Stable deposits |
0 |
0 |
|
|
| 4 |
Less stable deposits |
10,426 |
10,459 |
10,342 |
10,218 |
| 5 |
Unsecured wholesale funding |
120,798 |
118,144 |
112,573 |
112,934 |
| 6 |
Operational deposits (all counterparties) and deposits
in networks of cooperative
banks
|
12,455 |
11,748 |
11,617 |
11,503 |
| 7 |
Non-operational deposits (all counterparties) |
99,698 |
96,984 |
9,286 |
91,172 |
| 8 |
Unsecured debt |
8,645 |
9,412 |
7,164 |
10,259 |
| 9 |
Secured wholesale funding |
|
|
|
|
| 10 |
Additional requirements |
112,003 |
109,218 |
107,459 |
107,211 |
| 11 |
Outflows related to derivative exposures and other collateral
requirements |
4,702 |
5,055 |
5,906 |
6,946 |
| 12 |
Outflows related to loss of funding on debt products |
|
|
|
|
| 13 |
Credit and liquidity facilities |
107,301 |
104,163 |
101,553 |
100,265 |
| 14 |
Other contractual funding obligations |
24,309 |
24,003 |
26,217 |
22,920 |
| 15 |
Other contingent funding obligations |
45,010 |
43,662 |
42,398 |
42,676 |
| 16 |
Total cash outflows |
|
|
|
|
| Cash-inflows |
|
|
|
|
|
| 17 |
Secured lending (eg reverse repos) |
114,225 |
108,608 |
100,053 |
92,606 |
| 18 |
Inflows from fully performing exposures |
22,522 |
22,092 |
20,313 |
19,386 |
| 19 |
Other cash inflows |
2,057 |
2,107 |
2,187 |
2,105 |
| EU-19a |
(Difference between total weighted inflows and total
weighted outflows arising from
transactions in third countries where there are transfer restrictions or which are
denominated in non-convertible currencies)
|
|
|
|
|
| EU-19b |
(Excess inflows from a related specialised credit institution) |
|
|
|
|
| 20 |
Total cash inflows |
138,804 |
132,807 |
122,553 |
114,097 |
| EU-20a |
Fully exempt inflows |
|
|
|
|
| EU-20b |
Inflows Subject to 90% Cap |
|
|
|
|
| EU-20c |
Inflows Subject to 75% Cap |
133,127 |
125,929 |
115,718 |
105,833 |
| 21 |
Liquidity buffer |
|
|
|
|
| 22 |
Total net cash flows |
|
|
|
|
| 23 |
Liqudity Coverage Ratio (%) |
|
|
|
|
| Scope of consolidation: consolidated |
|
Total weighted value
(average) |
| € million |
|
31.12.2018 |
30.09.2018 |
30.06.2018 |
31.03.2018 |
| Number of data points used in the calculation of averages |
|
12 |
12 |
12 |
12 |
| High-quality liquid assets |
|
|
|
|
|
| 1 |
Total high-quality liquid assets (HQLA) |
103,541 |
102,306 |
103,223 |
103,848 |
| Cash-outflows |
|
|
|
|
|
| 2 |
Retail deposits and deposits from small business customers,
of which: |
1,564 |
1,569 |
1,551 |
1,523 |
| 3 |
Stable deposits |
0 |
0 |
|
|
| 4 |
Less stable deposits |
1,564 |
1,569 |
1,551 |
1,523 |
| 5 |
Unsecured wholesale funding |
73,032 |
72,323 |
68,879 |
71,606 |
| 6 |
Operational deposits (all counterparties) and deposits
in networks of cooperative
banks
|
3,114 |
2,937 |
2,904 |
2,876 |
| 7 |
Non-operational deposits (all counterparties) |
61,274 |
59,974 |
58,811 |
58,471 |
| 8 |
Unsecured debt |
8,645 |
9,412 |
9,529 |
10,259 |
| 9 |
Secured wholesale funding |
8,517 |
7,490 |
6,216 |
5,704 |
| 10 |
Additional requirements |
29,178 |
29,289 |
29,500 |
30,102 |
| 11 |
Outflows related to derivative exposures and other collateral
requirements |
4,127 |
4,692 |
5,496 |
6,465 |
| 12 |
Outflows related to loss of funding on debt products |
|
|
|
|
| 13 |
Credit and liquidity facilities |
25,051 |
24,596 |
24,004 |
23,637 |
| 14 |
Other contractual funding obligations |
1,198 |
1,067 |
974 |
798 |
| 15 |
Other contingent funding obligations |
325 |
368 |
397 |
404 |
| 16 |
Total cash outflows |
113,815 |
112,105 |
109,882 |
110,137 |
| Cash-inflows |
|
|
|
|
|
| 17 |
Secured lending (eg reverse repos) |
5,159 |
5,058 |
4,577 |
4,673 |
| 18 |
Inflows from fully performing exposures |
17,760 |
17,588 |
16,446 |
15,959 |
| 19 |
Other cash inflows |
2,057 |
2,107 |
2,187 |
2,105 |
| EU-19a |
(Difference between total weighted inflows and total
weighted outflows arising from
transactions in third countries where there are transfer restrictions or which are
denominated in non-convertible currencies)
|
|
|
|
|
| EU-19b |
(Excess inflows from a related specialised credit institution) |
|
|
|
|
| 20 |
Total cash inflows |
24,976 |
24,753 |
23,210 |
22,737 |
| EU-20a |
Fully exempt inflows |
|
|
|
|
| EU-20b |
Inflows Subject to 90% Cap |
|
|
|
|
| EU-20c |
Inflows Subject to 75% Cap |
|
|
23,210 |
22,737 |
|
|
|
|
|
Total adjusted value |
| 21 |
Liquidity buffer |
103,541 |
102,306 |
103,223 |
103,848 |
| 22 |
Total net cash flows |
88,838 |
87,353 |
86,672 |
87,400 |
| 23 |
Liqudity Coverage Ratio (%) |
116.55% |
117.12% |
119.00% |
118.82% |
3.6.2 Qualitative
information
| Concentration of financing and liquidity sources |
Crédit Agricole CIB implements an active policy of diversifying
its sources of financing
with a diversified market via multi-format issue programmes for various geographical
areas.
|
| Exposure to derivative instruments and possible collateral
calls |
The cash outflows relating to this item primarily reflect
the contingent risk of increasing
margin calls: - on derivative transactions in an adverse market scenario; - following
a downgrade in the Crédit Agricole CIB Group's external rating.
|
| Currency asymmetry in the LCR |
Residual asymmetries, which can be observed in some currencies,
are limited in size.
Moreover, the surplus of high-quality liquid assets available in the major currencies
can be easily converted to cover these needs, including in a crisis situation.
|
| Description of the degree of centralisation of the liquidity
management and interaction
between the Group's units
|
The Treasury Department is responsible for the overall
daily management of the Crédit
Agricole CIB Group's short-term funding. Within each cost centre, the Treasurer is
responsible for managing the funding activities within the allocated limits. He reports
to the Crédit Agricole CIB Treasurer and the local Assets and Liabilities Committee.
The Control department is responsible for supervising the requirements of the business
lines and the overall supervision of liquidity risk within the risk framework validated
by the Board of Directors. The operational management of long-term refinancing is
delegated to the ALM/ Execution department.
|
| Other elements in the calculation of the LCR not considered
in the LCR publication
model but which the institution considers relevant for its liquidity profile
|
In addition to the LCR surplus observed at 31 December
2018, Crédit Agricole CIB has
nonHQLA reserves that can be made liquid on the market and reserves that can be mobilized
in Central banks, including €4.5 billion in eligible receivables as of 31 December
2018.
|
3.7 COMPENSATION
POLICY
The information on the compensation policy required pursuant to EU Regulation 575-2013
(CRR) can be found in Chapter 3 of this Registration Document.
3.8 CROSS-REFERENCE
TABLE
► EDTF cross-reference
table
|
|
2018 Registration
Document |
| Recommendation |
Management report and other |
Risk factors |
Pillar 3 |
Consolidated financial statements |
| Introduction |
|
|
|
|
| 1 Cross-reference table |
|
|
P 284 |
|
| 2 Risk terminology and management, key parameters used |
|
P 158 to 206 |
P 233 and P 248 to 259 |
P 307 to 322, 324 to 351 |
| 3 Presentation of main risks and/or emerging risks |
|
P 158 to 206 |
|
P 324 to 351 |
| 4 New solvency regulatory framework and Group targets |
|
P 199 to 201 |
P 209 to 214 |
|
| Governance and risk management strategy |
|
|
|
|
| 5 Organisation of risk control and management |
P 77 to 82 |
P. 167 to 169 P. 171 to 180 |
|
|
| 6 Risk management strategy and implementation |
P 77 to 82 |
P 158 to 206, P. 171 to 180 |
P 212 to 227 |
|
| 7 Risk mapping by business line |
|
|
|
|
| 8 Governance and management of internal credit and market
stress testing |
|
P 167 to 169, P 186 |
P 209 |
|
| Capital requirements and risk-weighted assets |
|
|
|
|
| 9 Minimal capital requirements |
|
|
P 212 to 214 |
|
| 10a Breakdown of composition of capital |
|
|
P 219 to 222 |
|
| 10b Reconciliation of the balance sheet and prudential
balance sheet and accounting
equity and regulatory
|
|
|
P 210 to 222, 227 |
|
| 11 Changes in regulatory capital |
|
|
P 219 to 222 |
|
| 12 Capital trajectory and CRD 4 ratio objectives |
|
|
P 212 to 227 |
|
| 13 Risk-weighted assets by type of risk |
|
|
P 232 to 247 |
|
| 14 Risk-weighted assets and capital requirements by method
and type of exposure |
|
P 182 |
P 232 to 247 |
|
| 15 Credit risk exposure by category and internal ratings |
|
P 180 to 184, 189 |
P 234 to 270 |
|
| 16 Changes in risk-weighted assets by type of risk |
|
|
P 232 |
|
| 17 Description of backtesting models and their reliability |
|
P 182 and 192 to 194 |
P 262 |
|
| Liquidity |
|
|
|
|
| 18 Liquidity management |
|
P 199 to 201 |
P 281 to 282 |
|
| 19 Encumbered assets |
|
|
P 279 to 280 |
|
| 20 Breakdown of financial assets and liabilities by contractual
maturity |
|
|
|
P 345 to 347, 386 |
| 21 Management of liquidity and funding risk |
|
P 199 to 201 |
P 281 to 282 |
|
| Market risks |
|
|
|
|
| 22 to 24 Market risk measurement |
|
P 191 to 197 |
P 277 to 278 |
P. 307 to 322 P. 314 to 345 P 392 to 403 |
| 25 Market risk management techniques |
|
P 191 to 197 |
|
|
| Credit risk |
|
|
|
|
| 26 Maximum exposure, breakdown and diversification of
credit risks |
|
P 180 to 190 |
P 234 to 270 |
P 324 to 340 |
| 27 and 28 Provisioning and risk hedging policy |
|
P 189 to 190 |
|
P 307 to 322, 356 |
| 29 Derivative instruments: notional, counterparty risk,
offsetting |
|
P 180 to 190 P 189 to 190 P 187 P. 201 |
p.263 to 270 |
P 315 P 341 to 345 P 375 to 376 P. 395 |
| 30 Credit risk mitigation mechanisms |
|
P 186 to 187 |
P 268 to 269 |
P 390 |
| Operational and legal risks |
|
|
|
|
| 31 Other risks: insurance sector, operational, legal,
IT systems, business continuity
plans
|
P 77 to 82 |
P 158 to 166 P 202 to 206 |
|
|
| 32 Stated risks and on-going actions with respect |
|
P 202 to 204 |
|
P 381 to 383 |
► Pillar 3 cross-reference
table (CRR and CRD IV)
| Article CRR |
Theme |
2018 Registration Document |
Pages |
| 90 (CRD IV) |
Return on assets |
|
|
| 435 (CRR) |
1. Risk management objectives and policies |
Presentation of Committees - Corporate governance |
P. 77 to 82 |
|
|
|
Organisation of the Risk function Risk Committee |
P. 167 to 169 |
| 436 (a) (b) |
2. Scope of application |
Financial statements Note 11.2 |
P 210 to 211 and 227 |
|
|
|
Pillar 3 |
P. 405 to 407 |
| 436 (c) (d) (e) (CRR) |
2. Scope of application |
Information not published |
|
| 437 (CRR) |
3. Own funds |
Reconciliation of accounting and regulatory capital |
P. 222 |
|
|
|
Deeply subordinated notes and preferredshares |
P 216 to 217 |
| 438 (CRR) |
4. Capital requirements |
Risk weighted assets by type of risk and evolution |
P. 232 to 233 |
| 439 (CRR) |
5. Exposure to counterparty credit risk |
Overview - Exposure by type of risk Credit risk Counterparty
risk |
P. 234 to 269 |
| 440 (CRR) |
6. Capital buffers |
Pillar 1 and 2 minimum capital requirements and exposures
by geographic area |
P 213 to 214 P. 238 to 239 |
| 441 (CRR) |
7. Indicators of global systemic importance |
N/A |
|
| 442 (CRR) |
8. Credit risk adjustments |
Credit and counterparty risk mitigation techniques |
P. 241 to 247 |
| 443 (CRR) |
9. Encumbered assets |
Encumbered assets |
P 279 to 280 |
| 444 (CRR) |
10. Use of ECAIs |
Insurance providers |
P. 268 to 269 |
| 445 (CRR) |
11. Exposure to market risk |
Exposure to the trading book's market risk |
P 277to 278 |
| 446 (CRR) |
12. Operational risk |
Operational risk |
P 202 and 278 |
| 447 (CRR) |
13. Exposures in equities not included in the trading
book |
Exposures to equities included in the banking book |
P. 234 and 235 P 269 and 270 |
| 448 (CRR) |
14. Exposures to interest rate risk on positions not
included in the trading book |
Global interest rate risk -Risk management |
P 198 to 199 and P. 278 |
| 449 (CRR) |
15. Exposure to securitisation positions |
Securitisation - Pillar 3 |
P. 270 to 276 |
| 450 (CRR) |
16. Compensation policy |
Compensation policy -Corporate governance (chapter. 3) |
P 105 to 130 and P.282 |
| 451 (CRR) |
17. Leverage |
Leverage ratio |
P. 223 to 225 |
| 452 (CRR) |
18. Use of the IRB Approach for credit risk |
Credit risk under IRB approach |
P. 251 to 262 |
| 453 (CRR) |
19. Use of credit risk mitigation techniques |
Credit risk mitigation mechanism |
P 186 to 187 P. 268 to 269 |
| 454 (CRR) |
20. Use of the Advanced Measurement approaches for operational
risk |
Operational risk |
P 202 and 278 |
| 455 (CRR) |
21. Use of internal market risk models |
Exposures capital requirements under the internal models
approach |
P. 277 to 278 |
6. CONSOLIDATED
FINANCIAL STATEMENTS AT 31 DECEMBER 2018
Approved by the
Board of Directors on 11 February 2019 and submitted for approval
by the Ordinary General Meeting of 7 May 2019
| € 1,479 Million NET INCOME GROUP SHARE |
|
€ 20,426 Million TOTAL EQUITY |
|
|
€ 5,276 Million NET BANKING INCOME |
|
| € 511,702 Million TOTAL ASSETS |
|
123 NUMBER OF CONSOLIDATED ENTITIES |
The consolidated financial statements consist of the general framework, the consolidated
financial statements and the notes to the consolidated financial statements.
1. GENERAL FRAMEWORK
1.1 LEGAL PRESENTATION
OF CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
CORPORATE'S NAME
Crédit Agricole Corporate and Investment Bank.
TRADING NAMES
Crédit Agricole Corporate and Investment Bank - Crédit Agricole CIB - CACIB.
ADDRESS AND REGISTERED OFFICE
12, place des Etats-Unis
CS 70052
92547 MONTROUGE CEDEX
France.
REGISTRATION NUMBER
304 187 701, Nanterre Trade and Companies Registry.
NAF CODE
6419 Z (APE).
LEGAL FORM
Crédit Agricole Corporate and Investment Bank is a Public Limited Company (Société
Anonyme) under French law (with a Board of Directors) governed by the laws and regulations
applicable to credit institutions and French Public Limited Companies, as well as
by its Articles of Association.
Since December 2011, Crédit Agricole Corporate and Investment Bank is affiliated
with
Crédit Agricole according to the French Monetary and Financial code.
SHARE CAPITAL
€7,851,636,342
CORPORATE PURPOSE
(ART. 3 of the Company's Articles of Association)
The Company's purpose, in France and abroad, is:
| ― |
to carry out all banking and financial operations, and notably:
| ― |
the receipt of funds, the grant of loans, advances, credit, financing,
guarantees,
the implementation of deposits, payments, recoveries,
|
| ― |
financial advice and particularly regarding financing, debt,
subscription, issue,
investment, acquisition, disposal, merger, restructuring,
|
| ― |
the custody, management, purchase, sale, exchange, brokerage
and arbitrage of all
securities, company rights, financial products, derivatives, currencies, commodities,
precious metals and other securities of any kind;
|
|
| ― |
the provision of all investment services and related services
within the meaning of
the French Monetary and Financial Code and any subsequent text;
|
| ― |
to create and participate in any businesses, groupings, companies
from contributions,
subscription, purchase of shares or company rights, merger, or in any other manner;
|
| ― |
to carry out all commercial, industrial, securities or real estate
transactions connected
directly or indirectly to any or all of the above purposes or all similar or related
purposes;
|
| ― |
all for itself or on behalf of third parties or as a participating
member, and in
whatever form.
|
1.2 SYNTHETIC
GROUP ORGANISATION
|
|
CORPORATE AND INVESTMENT BANKING |
WEALTH MANAGEMENT |
|
|
| BRANCHES |
EUROPE |
ASIA |
AMERICA |
|
|
|
■ GERMANY |
■ SOUTH KOREA |
■ UNITED STATES |
■ MIAMI |
|
|
■ BELGIUM |
■ HONG-KONG |
■ CANADA |
|
|
|
■ SPAIN |
■ INDIA |
|
|
|
|
■ FINLAND |
■ JAPAN |
|
|
|
|
■ ITALY |
■ SINGAPORE |
|
|
|
|
■ LUXEMBOURG |
■ TAIWAN |
|
|
|
|
■ UNITED KINGDOM |
|
|
|
|
|
■ SWEDEN |
|
|
|
|
|
AFRICA/MIDDLE EAST |
|
|
|
|
|
■ ABU DHABI |
|
|
|
|
|
■ DUBAI |
|
|
|
| SUBSIDIARIES/INVESTMENTS |
EUROPE |
ASIA/PACIFIC |
AMERICA |
|
|
|
■ ESTER FINANCE TITRISATION [100%] |
■ CRÉDIT AGRICOLE CIB AUSTRALIA LTD [100%] |
■ BANCO CRÉDIT AGRICOLE BRASIL [100%] |
■ CA INDOSUEZ WEALTH (GROUP) [100%] |
|
|
■ CRÉDIT AGRICOLE CIB AO RUSSIA [100%] |
■ CRÉDIT AGRICOLE CIB CHINA LTD [100%] |
■ CRÉDIT AGRICOLE SECURITIES (USA) INC. [100%] |
■ CA INDOSUEZ WEALTH (FRANCE) AND SUBSIDIARIES [100%] |
|
|
■ KEPLER CHEUVREUX [15%] |
■ CA SECURITIES ASIA BV (TOKYO BRANCH) [100%] |
|
■ CA INDOSUEZ (SWITZERLAND), SUBSIDIARIES AND BRANCHES
[100%] |
|
|
■ CRÉDIT AGRICOLE CIB AIRFINANCE S.A. [100%] |
■ CA SECURITIES (ASIA) LTD (SEOUL BRANCH) [100%] |
|
■ CA INDOSUEZ |
|
|
|
■ CRÉDIT AGRICOLE ASIA |
|
WEALTH (EUROPE), SUBSIDIARIES AND BRANCHES [100%] |
|
|
|
SHIPFINANCE LTD [100%] |
|
■ CA INDOSUEZ WEALTH (BRAZIL) DTVM [100%] |
|
|
|
|
|
■ CFM INDOSUEZ WEALTH [70%] |
|
|
|
|
|
■ AZQORE [80%] |
|
|
AFRICA/MIDDLE EAST |
|
|
|
|
|
■ CRÉDIT AGRICOLE CIB ALGÉRIE SPA [100%] |
|
|
|
|
|
■ BSF [14,9%] |
|
|
|
1.3 RELATED PARTIES
Parties related to Crédit Agricole CIB are companies of the Crédit Agricole S.A.
Group,
companies of the Crédit Agricole CIB Group that are fully or proportionately consolidated,
and the senior executives of the Group.
Relations with
Crédit Agricole S.A. Group
On-and off-balance sheet amounts representing transactions between the Crédit Agricole
CIB Group and the rest of the Crédit Agricole S.A. Group are summarised in the following
table:
| Outstandings (€ million) |
31.12.2018 |
| Assets |
|
| Loans and advances |
9,978 |
| Derivatives financial instruments held for trading |
19,161 |
| Liabilities |
|
| Accounts and deposits |
19,705 |
| Derivatives financial instruments held for trading |
18,581 |
| Subordinated debts |
4,957 |
| Preferred shares |
|
| Financing and guarantee commitments |
|
| Other guarantees given |
1,256 |
| Counter-guarantees received |
2,895 |
| Other guarantees received |
|
| Refinancing agreements received |
|
The outstandings on loans and unsettled accounts represent the cash flow between
Crédit
Agricole CIB and Crédit Agricole S.A.. The outstandings of derivative instruments
held for trading mainly represent Crédit Agricole Group interest rate hedging transactions
arranged by Crédit Agricole CIB in the market.
Crédit Agricole CIB, which is 99.9% owned by Crédit Agricole Group since 27 December
1996, and some of its subsidiaries are part of Crédit Agricole S.A.'s tax consolidation
group.
In this regard, Crédit Agricole S.A. compensates the Crédit Agricole CIB sub-group
for its tax losses, which are charged against Crédit Agricole Group's taxable income.
Relations between
consolidated companies of rédit Agricole CIB Group
A list of the Crédit Agricole CIB Group's consolidated companies can be found in
Note
11.
Transactions realised between two fully consolidated entities are fully eliminated.
Outstandings at year-end between fully consolidated companies and equity consolidated
companies are not eliminated in the Group's consolidated financial statements.
As at 31 December 2018, the non-netted and off-balance sheet outstandings reported
by Crédit Agricole CIB and its affiliates UBAF and Elipso are:
| Outstandings (€ million) |
31.12.2018 |
| Assets |
|
| Loans and advances |
|
| Derivatives financial instruments held for trading |
3 |
| Liabilities |
|
| Accounts and deposits |
1 |
| Derivatives financial instruments held for trading |
11 |
| Financing and guarantee commitments |
|
| Other guarantees given |
2 |
| Counter-guarantees received |
|
Relations with
senior management
Detailed information on senior management compensation is provided in Note 7.7
"Executive
officers' compensation".
2. CONSOLIDATED
FINANCIAL STATEMENTS
2.1 INCOME STATEMENT
| € million |
Notes |
31.12.2018 |
31.12.2017 |
| Interest and similar income |
4.1 |
6,215 |
5,570 |
| Interest and similar expenses |
4.1 |
(3,758) |
(2,963) |
| Fee and commission income |
4.2 |
1,581 |
1,557 |
| Fee and commission expenses |
4.2 |
(624) |
(484) |
| Net gains (losses) on financial instruments at fair value
through profit or loss |
4.3 |
1,774 |
1,064 |
| Net gains (losses) on held-for-trading assets/liabilities |
|
540 |
|
| Net gains (losses) on other financial assets/liabilities
at fair value through profit
or loss
|
|
1,234 |
|
| Net gains (losses) on financial instruments at fair value
through other comprehensive
income
|
4.4 |
92 |
|
| Net gains (losses) on debt instruments at fair value
through other comprehensive income
that may be reclassified subsequently to profit or loss
|
|
|
|
| Remuneration of equity instruments measured at fair value
through other comprehensive
income that will not be reclassified subsequently to profit or loss (dividends)
|
|
92 |
|
| Net gains (losses) on available-for-sale financial assets |
|
|
255 |
| Net gains (losses) arising from the derecognition of
financial assets at amortised
cost
|
4.5 |
(1) |
|
| Net gains (losses) arising from the reclassification
of financial assets at amortised
cost to financial assets at fair value through profit or loss
|
|
|
|
| Net gains (losses) arising from the reclassification
of financial assets at fair value
through other comprehensive income to financial assets at fair value through profit
or loss
|
|
|
|
| Income on other activities |
4.6 |
94 |
45 |
| Expenses on other activities |
4.6 |
(97) |
(45) |
| Revenues |
|
5,276 |
4,999 |
| Operating expenses |
4.7 |
(3,235) |
(3,094) |
| Depreciation, amortisation and impairment of property,
plant & equipment and intangible
assets
|
4.8 |
(86) |
(91) |
| Gross operating income |
|
1,955 |
1,814 |
| Cost of risk |
4.9 |
55 |
(330) |
| Operating income |
|
2,010 |
1,484 |
| Share of net income of equity-accounted entities |
|
|
277 |
| Net gains (losses) on other assets |
4.10 |
|
18 |
| Change in value of goodwill |
|
|
|
| Pre-tax income |
|
2,010 |
1,779 |
| Income tax charge |
4.11 |
(525) |
(614) |
| Net income from discontinued operations |
|
|
|
| Net income |
|
1,485 |
1,165 |
| Non-controlling interests |
6.18 |
6 |
9 |
| Net income group share |
|
1,479 |
1,156 |
| Earnings per share (1) |
6.17 |
4.44 |
3.39 |
| Diluted earnings per share (1) |
6.17 |
4.44 |
3.39 |
(1)
Corresponds to income including net income from discontinued operations.
2.2 NET INCOME
AND OTHER COMPREHENSIVE INCOME
| € million |
Notes |
31.12.2018 |
31.12.2017 |
| Net income |
|
1,485 |
1,165 |
| Actuarial gains and losses on post-employment benefits |
4.12 |
52 |
67 |
| Other comprehensive income on financial liabilities attributable
to changes in own
credit risk
|
4.12 |
368 |
|
| Other comprehensive income on equity instruments that
will not be reclassified to
profit or loss
|
4.12 |
264 |
|
| Pre-tax other comprehensive income on items that will
not be reclassified to profit
or loss excluding equity-accounted entities
|
4.12 |
684 |
67 |
| Pre-tax other comprehensive income on items that will
not be reclassified to profit
or loss on equity-accounted entities
|
4.12 |
|
|
| Income tax related to items that will not be reclassified
to profit or loss excluding
equity-accounted entities
|
4.12 |
(262) |
(38) |
| Income tax related to items accounted that will not be
reclassified to profit or loss
on equity-accounted entities
|
4.12 |
|
|
| Other comprehensive income on items that will not be
reclassified to profit or loss
from discontinued operations
|
4.12 |
|
|
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss net of income tax
|
4.12 |
422 |
29 |
| Gains and losses on translation adjustments |
4.12 |
148 |
(548) |
| Gains and losses on available-for-sale financial assets |
|
|
(298) |
| Other comprehensive income on debt instruments that may
be reclassified to profit
or loss
|
4.12 |
(40) |
|
| Gains and losses on hedging derivative instruments |
4.12 |
(109) |
(224) |
| Pre-tax other comprehensive income on items that may
be reclassified to profit or
loss excluding equity-accounted entities
|
4.12 |
(1) |
(1,070) |
| Pre-tax other comprehensive income on items that may
be reclassified to profit or
loss on equity-accounted entities, Group Share
|
4.12 |
(1) |
(357) |
| Income tax related to items that may be reclassified
to profit or loss excluding equity-accounted
entities
|
4.12 |
47 |
124 |
| Income tax related to items that may be reclassified
to profit or loss on equity-accounted
entities
|
4.12 |
|
|
| Other comprehensive income on items that may be reclassified
to profit or loss from
discontinued operations
|
4.12 |
|
|
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss of income tax
|
4.12 |
45 |
(1,303) |
| Other comprehensive income net of income tax |
4.12 |
467 |
(1,274) |
| Net income and other comprehensive income |
|
1,952 |
(109) |
| Of which Group share |
|
1,951 |
(112) |
| Of which non-controlling interests |
|
1 |
3 |
2.3 BALANCE SHEET
ASSETS
| € million |
Notes |
31.12.2018 |
01.01.2018 |
31.12.2017 |
| Cash, central banks |
6.1 |
46,538 |
32,604 |
32,604 |
| Financial assets at fair value through profit or loss |
3.1; 6.2; 6.6; 6.7 |
240,774 |
238,304 |
237,001 |
| Financial assets held for trading |
|
240,560 |
237,896 |
|
| Other financial instruments at fair value through profit
or loss |
|
214 |
408 |
|
| Hedging derivative Instruments |
3.1; 3.2; 3.4 |
965 |
1,095 |
1,101 |
| Financial assets at fair value through other comprehensive
income |
3.1; 6.4; 6.6; 6.7 |
11,362 |
18,443 |
|
| Debt instruments at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
|
9,700 |
16,992 |
|
| Equity instruments at fair value through other comprehensive
income that will not
be reclassified to profit or loss
|
|
1,662 |
1,451 |
|
| Available-for-sale financial assets |
|
|
|
27,304 |
| Financial assets at amortised cost |
3.1; 3.3; 6.5; 6.6; 6.7 |
181,371 |
169,051 |
|
| Loans and receivables due from credit institutions |
|
19,172 |
26,244 |
26,269 |
| Loans and receivables due from customers |
|
134,302 |
119,603 |
135,039 |
| Debt securities |
|
27,897 |
23,204 |
|
| Revaluation adjustment on interest rate hedged portfolios |
|
2 |
17 |
17 |
| Held-to-maturity financial assets |
|
|
|
|
| Current and deferred tax assets |
6.10 |
1,145 |
1,289 |
1,104 |
| Accruals, prepayments and sundry assets |
6.11 |
27,862 |
26,587 |
26,587 |
| Non-current assets held for sale and discontinued operations |
|
|
|
|
| Investments in equity-accounted entities |
6.12 |
|
|
|
| Investment property |
|
1 |
1 |
1 |
| Property, plant and equipment |
6.13 |
356 |
339 |
339 |
| Intangible assets |
6.13 |
301 |
233 |
233 |
| Goodwill |
6.14 |
1,025 |
987 |
987 |
| Total assets |
|
511,702
|
488,950 |
488,586 |
|
LIABILITIES & EQUITY
|
|
|
|
|
| € million |
Notes |
31.12.2018 |
01.01.2018 |
31.12.2017 |
| Central banks |
6.1 |
877 |
1,585 |
1,585 |
| Financial liabilities at fair value through profit or
loss |
6.2 |
234,880 |
237,177 |
237,171 |
| Financial liabilities held for trading |
|
208,156 |
212,687 |
|
| Financial liabilities designated at fair value through
profit or loss |
|
26,724 |
24,490 |
|
| Hedging derivative Instruments |
3.2; 3.4 |
1,067 |
999 |
1,005 |
| Financial liabilities at amortised cost |
|
222,353 |
198,940 |
|
| Due to credit institutions |
3.3; 6.8 |
47,302 |
44,002 |
44,002 |
| Due to customers |
3.1; 3.3; 6.8 |
123,510 |
106,960 |
106,960 |
| Debt securities |
3.2; 3.3; 6.8 |
51,541 |
47,977 |
47,977 |
| Revaluation adjustment on interest rate hedged portfolios |
|
5 |
27 |
27 |
| Current and deferred tax liabilities |
6.10 |
1,959 |
1,765 |
1,588 |
| Accruals, deferred income and sundry liabilities |
6.11 |
23,487 |
22,634 |
22,634 |
| Liabilities associated with non-current assets held for
sale and discontinued operations |
|
|
|
|
| Insurance compagny technical reserves |
|
10 |
10 |
10 |
| Provisions |
6.15 |
1,679 |
1,739 |
1,434 |
| Subordinated debt |
6.16 |
4,959 |
5,148 |
5,148 |
| Total Liabilities |
|
491,276 |
470,024 |
469,541 |
| Equity |
|
20,426 |
18,926 |
19,045 |
| Equity - Group share |
|
20,308 |
18,821 |
18,940 |
| Share capital and reserves |
|
12,860 |
11,860 |
11,860 |
| Consolidated reserves |
|
5,795 |
7,259 |
5,775 |
| Other comprehensive income |
|
174 |
(298) |
149 |
| Other comprehensive income on discontinued operations |
|
|
|
|
| Net income (loss) for the year |
|
1,479 |
|
1,156 |
| Non-controlling interests |
|
118 |
105 |
105 |
| Total liabilities and equity |
|
511,702 |
488,950 |
488,586 |
2.5 STATEMENT
OF CHANGES IN EQUITY
|
|
Group share |
|
|
Share and capital
reserves |
| € million |
Share capital |
Share premium and consolidated
reserves(1) |
Elimination of treasury shares |
Other equity instruments |
Total capital and consolidated
reserves |
| Equity at 1 st January 2017
|
7,852 |
7,936 |
|
2,277 |
18,065 |
| Capital increase |
|
|
|
|
|
| Changes in treasury shares held |
|
|
|
|
|
| Issuance of equity instruments |
|
|
|
|
|
| Remuneration of undated deeply subordinated notes |
|
|
|
(170) |
(170) |
| Dividends paid in 2017 |
|
(241) |
|
|
(241) |
| Impact of acquisitions/disposals on non-controlling interests |
|
|
|
|
|
| Changes due to share-based payments |
|
|
|
|
|
| Changes due to transactions with shareholders |
|
|
|
|
|
| Changes in other comprehensive income |
|
(241) |
|
(170) |
(411) |
| Share of changes in equity-accounted entities |
|
|
|
|
|
| Net income for 2017 |
|
|
|
|
|
| Other changes |
|
(19) |
|
|
(19) |
| Equity at 31 December 2017 |
7,852 |
7,676 |
|
2,107 |
17,635 |
| Appropriation of 2017 net income |
|
1,156 |
|
|
1,156 |
| Equity at 1 st January 2018
|
7,852 |
8,832 |
|
2,107 |
18,791 |
| Impacts of new accounting standards (1) |
|
328 |
|
|
328 |
| Equity at 1 st January 2018 Restated
|
7,852 |
9,160 |
|
2,107 |
19,119 |
| Capital increase |
|
|
|
|
|
| Changes in treasury shares held |
|
|
|
|
|
| Issuance of equity instruments |
|
|
|
1,000 |
1,000 |
| Remuneration of undated deeply subordinated notes |
|
|
|
(190) |
(190) |
| Dividends paid in 2018 |
|
(1,236) |
|
|
(1,236) |
| Dividends received from the Regional Banks |
|
|
|
|
|
| Impact of acquisitions/disposals on non-controlling interests |
|
(14) |
|
|
(14) |
| Changes due to share-based payments |
|
|
|
|
|
| Changes due to transactions with shareholders |
|
(1,250) |
|
810 |
(440) |
| Changes in other comprehensive income |
|
(72) |
|
|
(72) |
| Of which other comprehensive income on equity instruments
that will not be reclassified
to profit or loss reclassified to consolidated reserves
|
|
(60) |
|
|
(60) |
| Of which other comprehensive income attributable to changes
in own credit risk reclassified
to consolidated reserves
|
|
(12) |
|
|
(12) |
| Share of changes in equity-accounted entities |
|
|
|
|
|
| Net income for 2018 (1) |
|
|
|
|
|
| Other changes (2) |
|
48 |
|
|
48 |
| Equity at 31 December 2018 |
7,852 |
7,886 |
|
2,917 |
18,655 |
|
|
Group share |
Non-controlling interests |
|
|
Other comprehensive
income |
|
|
|
| € million |
Other comprehensive income on items
that may be reclassified to profit and loss |
Other comprehensive income on items
that will not be reclassified to profit and loss |
Total other comprehensive income |
Net income |
Total equity |
Capital, associated reserves and
income |
| Equity at 1 st January 2017
|
1,751 |
(334) |
1,417 |
|
19,482 |
102 |
| Capital increase |
|
|
|
|
|
|
| Changes in treasury shares held |
|
|
|
|
|
|
| Issuance of equity instruments |
|
|
|
|
|
|
| Remuneration of undated deeply subordinated notes |
|
|
|
|
(170) |
|
| Dividends paid in 2017 |
|
|
|
|
(241) |
(10) |
| Impact of acquisitions/disposals on non-controlling interests |
|
|
|
|
|
|
| Changes due to share-based payments |
|
|
|
|
|
|
| Changes due to transactions with shareholders |
|
|
|
|
|
|
| Changes in other comprehensive income |
|
|
|
|
(411) |
(10) |
| Share of changes in equity-accounted entities |
(940) |
29 |
(911) |
|
(911) |
|
| Net income for 2017 |
|
|
|
1,156 |
1,156 |
9 |
| Other changes |
|
|
|
|
(19) |
|
| Equity at 31 December 2017 |
454 |
(305) |
149 |
1,156 |
18,940 |
101 |
| Appropriation of 2017 net income |
|
|
|
(1,156) |
|
|
| Equity at 1 st January 2018
|
454 |
(305) |
149 |
|
18,940 |
101 |
| Impacts of new accounting standards (1) |
36 |
(483) |
(447) |
|
(119) |
|
| Equity at 1 st January 2018 Restated
|
490 |
(788) |
(298) |
|
18,821 |
101 |
| Capital increase |
|
|
|
|
|
11 |
| Changes in treasury shares held |
|
|
|
|
|
|
| Issuance of equity instruments |
|
|
|
|
1,000 |
|
| Remuneration of undated deeply subordinated notes |
|
|
|
|
(190) |
|
| Dividends paid in 2018 |
|
|
|
|
(1,236) |
(8) |
| Dividends received from the Regional Banks |
|
|
|
|
|
|
| Impact of acquisitions/disposals on non-controlling interests |
|
|
|
|
(14) |
9 |
| Changes due to share-based payments |
|
|
|
|
|
|
| Changes due to transactions with shareholders |
|
|
|
|
(440) |
12 |
| Changes in other comprehensive income |
47 |
426 |
473 |
|
401 |
|
| Of which other comprehensive income on equity instruments
that will not be reclassified
to profit or loss reclassified to consolidated reserves
|
|
60 |
60 |
|
|
|
| Of which other comprehensive income attributable to changes
in own credit risk reclassified
to consolidated reserves
|
|
12 |
12 |
|
|
|
| Share of changes in equity-accounted entities |
(1) |
|
(1) |
|
(1) |
|
| Net income for 2018 (1) |
|
|
|
1,479 |
1,479 |
6 |
| Other changes (2) |
|
|
|
|
48 |
|
| Equity at 31 December 2018 |
536 |
(362) |
174 |
1,479 |
20,308 |
119 |
|
|
Non-controlling interests |
|
|
|
Other comprehensive
income |
|
|
| € million |
Other comprehensive income on items
that may be reclassified to profit and loss |
Other comprehensive income on items
that will not be reclassified to profit and loss |
Total other comprehensive income |
Total equity |
Total consolidated equity |
| Equity at 1 st January 2017
|
9 |
1 |
10 |
112 |
19,594 |
| Capital increase |
|
|
|
|
|
| Changes in treasury shares held |
|
|
|
|
|
| Issuance of equity instruments |
|
|
|
|
|
| Remuneration of undated deeply subordinated notes |
|
|
|
|
(170) |
| Dividends paid in 2017 |
|
|
|
(10) |
(251) |
| Impact of acquisitions/disposals on non-controlling interests |
|
|
|
|
|
| Changes due to share-based payments |
|
|
|
|
|
| Changes due to transactions with shareholders |
|
|
|
|
|
| Changes in other comprehensive income |
|
|
|
(10) |
(421) |
| Share of changes in equity-accounted entities |
(6) |
|
(6) |
(6) |
(917) |
| Net income for 2017 |
|
|
|
9 |
1,165 |
| Other changes |
|
|
|
|
(19) |
| Equity at 31 December 2017 |
3 |
1 |
4 |
105 |
19,045 |
| Appropriation of 2017 net income |
|
|
|
|
|
| Equity at 1 st January 2018
|
3 |
1 |
4 |
105 |
19,045 |
| Impacts of new accounting standards (1) |
|
|
|
|
(119) |
| Equity at 1 st January 2018 Restated
|
3 |
1 |
4 |
105 |
18,926 |
| Capital increase |
|
|
|
11 |
11 |
| Changes in treasury shares held |
|
|
|
|
|
| Issuance of equity instruments |
|
|
|
|
1,000 |
| Remuneration of undated deeply subordinated notes |
|
|
|
|
(190) |
| Dividends paid in 2018 |
|
|
|
(8) |
(1,244) |
| Dividends received from the Regional Banks |
|
|
|
|
|
| Impact of acquisitions/disposals on non-controlling interests |
|
|
|
9 |
(5) |
| Changes due to share-based payments |
|
|
|
|
|
| Changes due to transactions with shareholders |
|
|
|
12 |
(428) |
| Changes in other comprehensive income |
(1) |
(4) |
(5) |
(5) |
396 |
| Of which other comprehensive income on equity instruments
that will not be reclassified
to profit or loss reclassified to consolidated reserves
|
|
|
|
|
|
| Of which other comprehensive income attributable to changes
in own credit risk reclassified
to consolidated reserves
|
|
|
|
|
|
| Share of changes in equity-accounted entities |
|
|
|
|
(1) |
| Net income for 2018 (1) |
|
|
|
6 |
1,485 |
| Other changes (2) |
|
|
|
|
48 |
| Equity at 31 December 2018 |
2 |
(3) |
(1) |
118 |
20,426 |
(1)
Consolidated reserves before elimination of treasury shares.
(2)
Details of the impact on equity related to the application of IFRS 9 are presented
in the note "Impact on equity of the application of IFRS 9 at 1 January 2018".
2.6 CASH FLOW
STATEMENT
The cash flow statement is presented using the indirect method.
Operating activities are the Crédit Agricole CIB Group's revenue generating activities.
Tax inflows and outflows are included in full within operating activities.
Investment activities show the impact of cash inflows and outflows associated with
purchases and sales of investments in consolidated and non-consolidated companies,
property, plant and equipment and intangible assets. This section includes strategic
equity investments in the available-for-sale financial assets portfolio.
Financing activities show the impact of cash inflows and outflows associated with
shareholders' equity and long-term financing.
Net cash flows attributable to the operating, investment and financing activities
from discontinued operations are presented under separate headings in the cash flow
statement.
Net cash and cash equivalents include cash, debit and credit balances with central
banks, and debit and credit sight balances with banks.
| € million |
Notes |
31.12.2018 |
31.12.2017 |
| Pre-tax income |
|
2,010 |
1,779 |
| Net depreciation and impairment of property, plant &
equipment and intangible assets |
|
86 |
91 |
| Impairment of goodwill and other fixed assets |
6.14 |
|
|
| Net depreciation charges to provisions |
|
(19) |
290 |
| Share of net income of equity-accounted entities |
|
|
(277) |
| Net income (loss) from investment activities |
|
|
(11) |
| Net income (loss) from financing activities |
|
188 |
172 |
| Other movements |
|
(56) |
(571) |
| Total non-cash and other adjustment items included in
pre-tax income |
|
199 |
(306) |
| Change in interbank items |
|
5,536 |
8,075 |
| Change in customer items |
|
(592) |
237 |
| Change in financial assets and liabilities |
|
1,935 |
5,728 |
| Change in non-financial assets and liabilities |
|
(371) |
933 |
| Dividends received from equity-accounted entities |
|
|
92 |
| Tax paid |
|
(203) |
325 |
| Net change in assets and liabilities used in operating
activities |
|
6,305 |
15,390 |
| Cash provided (used) by discontinued operations |
|
|
|
| Total net cash flows from (used by) operating activities
(A) |
|
8,514 |
16,863 |
| Change in equity investments (1) |
|
(7) |
1,276 |
| Change in property, plant & equipment and intangible
assets |
|
(159) |
(166) |
| Cash provided (used) by discontinued operations |
|
|
|
| Total net cash flows from (used by) investment activities
(B) |
|
(166) |
1,110 |
(1)
This line includes net impacts of acquisitions and disposals of consolidated equity
investments on cash. This mainly relates to the consolidation effect of Banca Leonardo
for -€20 million and the conclusion of tax lease transactions in the Crédit Agricole
CIB Spain entity for +€19.6 million.
| € million |
Notes |
31.12.2018 |
31.12.2017 |
| Cash received from (paid to) shareholders (2) |
|
(422) |
(421) |
| Other cash provided (used) by financing activities (3) |
|
824 |
380 |
| Cash provided (used) by discontinued operations |
|
|
|
| Total net cash flows from (used by) financing activities
(C) |
|
402 |
(41) |
| Impact of exchange rate changes on cash and cash equivalent
(D) |
|
1,298 |
(1,464) |
| Net increase/(decrease) in cash & cash equivalent
(A + B + C + D) |
|
10,048 |
16,468 |
| Cash and cash equivalents at beginning of period |
|
32,101 |
15,633 |
| Net cash accounts and accounts with central banks (4) |
|
31,008 |
16,898 |
| Net demand loans and deposits with credit institutions
(5) |
|
1,093 |
(1,265) |
| Cash and cash equivalents at end of period |
|
42,149 |
32,101 |
| Net cash accounts and accounts with central banks (4) |
|
45,646 |
31,008 |
| Net demand loans and deposits with credit institutions
(5) |
|
(3,497) |
1,093 |
| Net change in cash and cash equivalents |
|
10,048 |
16,468 |
(2)
For 2018, this amount includes the payment of Crédit Agricole CIB dividends to Crédit
Agricole S.A. for -€1,203 million, an AT1 issue by Crédit Agricole CIB subscribed
by Crédit Agricole S.A. for €1 billion and a payment of interest under the AT1 issue
of -€190 million.
(3)
This line mainly records the issue of the TSS call subscribed by Crédit Agricole S.A.
London of -€590 million, the bond loan with Crédit Agricole S.A. of €1,350 million,
the increase of the subordinated debt at Crédit Agricole S.A. of €250 million and
the payment of interest of -€188 million.
(4)
Consisting of the net balance of the "Cash, central banks" item, excluding accrued
interest and including cash of entities reclassified as discontinued operations.
(5)
Consisting of the balance of the "Non doubtful current accounts in debit" and "Non
doubtful overnight accounts and advances" items as detailed in Note 6.5 and the "Current
accounts in credit" and "Overnight accounts and deposits" items as detailed in Note
6.8 (excluding accrued interest and including Crédit Agricole internal transactions);
3. EFFECTS OF
THE APPLICATION OF IFRS 9 AT 1 JANUARY 2018
3.1 TRANSITION
FROM THE BALANCE SHEET FROM 31 DECEMBER 2017 TO 1 JANUARY 2018
The following tables present the financial Assets and Liabilities affected by the
implementation of IFRS 9 at 1 January 2018.
FINANCIAL ASSETS
|
|
31.12.2017 |
01.01.2018 |
|
|
IAS 39 |
Reclassifications
in accordance with IFRS 9 |
|
|
|
|
Financial assets
at fair value through profit or loss |
| € million |
Carrying amount in accordance with
IAS 39 |
Central banks |
Held-for- trading financial assets |
Equity instruments |
Debt instruments that do not meet
the conditions of the "SPPI" test |
Assets backing unit-linked contracts |
| IAS 39 |
|
|
|
|
|
|
| Central banks |
32,591 |
32,591 |
|
|
|
|
| Financial assets at fair value through profit or loss |
238,102 |
|
236,864 |
|
144 |
|
| Held-for-trading financial assets |
236,858 |
|
236,864 |
|
|
|
| Financial assets designated at fair value through profit
or loss (1) |
144 |
|
|
|
144 |
|
| Hedging derivative instruments |
1,101 |
|
|
|
|
|
| Available-for-sale financial assets (2) |
27,304 |
|
|
96 |
30 |
|
| Loans and receivables due from credit institutions |
26,268 |
|
|
|
|
|
| Loans and receivables due from customers (3) |
135,039 |
|
1,032 |
|
261 |
|
| Held-to-maturity financial assets |
|
|
|
|
|
|
| Carrying amount determined in accordance with IAS 39 |
459,306 |
|
|
|
|
|
| Restatement of carrying amount in accordance with IFRS
9 |
|
|
|
|
(122) |
|
| 01.01.2018 |
|
|
|
|
|
|
| Carrying amount in accordance with IFRS 9 |
|
32,591 |
237,896 |
96 |
312 |
|
|
|
01.01.2018 |
|
|
Reclassifications
in accordance with IFRS 9 |
|
|
|
Financial assets
at fair value through other comprehensive income |
Financial assets
at amortised cost |
| € million |
Hedging derivative instruments |
Debt instruments at fair value
through other comprehensive income that may be reclassified
to profit or loss
|
Equity instruments at fair value
through other comprehensive income that will not
be reclassified to profit or loss
|
Loans and receivables due from
credit institutions |
Loans and receivables due from
customers |
Debt securities |
| IAS 39 |
|
|
|
|
|
|
| Central banks |
|
|
|
|
|
|
| Financial assets at fair value through profit or loss |
1,095 |
|
|
|
|
|
| Held-for-trading financial assets |
(6) |
|
|
|
|
|
| Financial assets designated at fair value through profit
or loss (1) |
|
|
|
|
|
|
| Hedging derivative instruments |
1,101 |
|
|
|
|
|
| Available-for-sale financial assets (2) |
|
16,992 |
1,452 |
|
|
8,734 |
| Loans and receivables due from credit institutions |
|
|
|
26,268 |
|
|
| Loans and receivables due from customers (3) |
|
|
|
|
119,253 |
14,493 |
| Held-to-maturity financial assets |
|
|
|
|
|
|
| Carrying amount determined in accordance with IAS 39 |
|
|
|
|
|
|
| Restatement of carrying amount in accordance with IFRS
9 |
|
|
|
(24) |
349 |
(24) |
| 01.01.2018 |
|
|
|
|
|
|
| Carrying amount in accordance with IFRS 9 |
1,095 |
16,992 |
1,452 |
26,244 |
119,603 |
23,204 |
|
|
IAS 39 |
Reclassifications
in accordance with IFRS 9 |
|
|
|
Of which financial
assets reclassified out of financial assets designated at fair
value through profit or loss in accordance with IFRS 9
|
| € million |
Carrying amount in accordance with
IAS 39 |
Reclassifications as required by
IFRS 9 |
Reclassifications elected by the
entity |
| Financial assets designated at fair value through profit
or loss |
144 |
144 |
|
| Debt instruments |
144 |
144 |
|
| Equity instruments |
|
|
|
(1)
Reclassifications related to financial assets designated at fair value through profit
or loss break down as follows:
The reclassifications of financial assets designated at fair value through profit
or loss correspond to the undated subordinated notes which can be converted into Orange
shares not meeting "SPPI" criteria.
(2)
The reclassification of assets available for sale into financial assets at amortised
cost is part of the bank's management of its liquidity portfolio.
(3)
The reclassification of loans and receivables due from customers into financial assets
held-for-trading corresponds to the end of bifurcated accounting in the section on
financing forward transactions.
PASSIFS FINANCIERS
|
|
31.12.2017 |
01.01.2018 |
|
|
|
Reclassifications
in accordance with IFRS 9 |
|
|
IAS 39 |
Financial liabilities
at fair value through profit or loss |
|
Financial liabilities
at amortised cost |
| € million |
Carrying amount in accordance with
IAS 39 |
Held-for-trading financial liabilities |
Financial liabilities designated
at fair value through profit or loss |
Hedging derivative instruments |
Due to credit institutions |
Due to customers |
| IAS 39 |
|
|
|
|
|
|
| Financial liabilities at fair value through profit or
loss |
238,175 |
212,687 |
24,489 |
999 |
|
|
| Held-for-trading financial liabilities |
212,681 |
212,687 |
|
|
|
|
| Financial liabilities designated at fair value through
profit or loss (1) |
24,489 |
|
24,489 |
|
|
|
| Hedging derivative instruments |
1,005 |
|
|
999 |
|
|
| Due to credit institutions |
44,002 |
|
|
|
44,002 |
|
| Due to customers |
106,960 |
|
|
|
|
106,960 |
| Debt securities |
47,977 |
|
|
|
|
|
| Liabilities associated with non-current assets held for
sale and discontinued operations |
|
|
|
|
|
|
| Carrying amount determined in accordance with IAS 39 |
437,115 |
|
|
|
|
|
| Restatement of carrying amount in accordance with IFRS
9 |
|
|
|
|
|
|
| 01.01.2018 |
|
|
|
|
|
|
| Carrying amount in accordance with IFRS 9 |
|
212,687 |
24,489 |
999 |
44,002 |
106,960 |
|
|
01.01.2018 |
|
|
Reclassifications
in accordance with IFRS 9 |
|
|
Financial liabilities at amortised
cost |
Liabilities associated with non-current
assets held for sale and discontinued operations |
| € million |
Debt securities |
|
| IAS 39 |
|
|
| Financial liabilities at fair value through profit or
loss |
|
|
| Held-for-trading financial liabilities |
|
|
| Financial liabilities designated at fair value through
profit or loss (1) |
|
|
| Hedging derivative instruments |
|
|
| Due to credit institutions |
|
|
| Due to customers |
|
|
| Debt securities |
47,977 |
|
| Liabilities associated with non-current assets held for
sale and discontinued operations |
|
|
| Carrying amount determined in accordance with IAS 39 |
|
|
| Restatement of carrying amount in accordance with IFRS
9 |
|
|
| 01.01.2018 |
|
|
| Carrying amount in accordance with IFRS 9 |
47,977 |
|
(1)
Reclassifications related to financial liabilities designated at fair value through
profit or loss break down as follows:
|
|
IAS 39 |
Reclassifications
in accordance with IFRS 9 |
|
|
|
Of which financial
liabilities reclassified out of financial liabilities designated
at fair value though profit or loss in accordance with IFRS 9
|
| € million |
Carrying amount in accordance with
IAS 39 |
Reclassifications as required by
IFRS 9 |
Reclassifications elected by the
entity |
| Financial liabilities designated at fair value through
profit or loss |
24,489 |
|
|
3.2 TRANSITION
BETWEEN IMPAIRMENTS OR PROVISIONS CONSTITUTED UNDER IAS 39 AND CORRECTIONS
OF VALUE FOR LOSSES CONSTITUTED UNDER IFRS 9
Pursuant to the application of IFRS 9 at 1 January 2018, the procedures for provisioning
change significantly. The following table presents the transition from liability impairment
or provisions recognised at 31 December 2017 (under the provisions of IAS 39) to the
amount of value correction for losses recognised at 1 January 2018 (under the provisions
of IFRS 9):
|
|
31.12.2017 |
01.01.2018 |
|
|
|
IFRS 9 - Impairment
reclassifications |
|
|
|
|
Financial assets
at fair value through profit or loss |
| € million |
|
|
|
Other financial instruments
at fair value through profit or loss |
|
|
IAS 39 - Amount of impairment |
Central banks |
Held-for- trading financial assets |
Equity instruments |
Debt instruments that do not meet
the conditions of the "SPPI" test |
Financial assets designated at
fair value through profit or loss |
| Impairment in accordance with IAS 39 |
|
|
|
|
|
|
| Central banks |
|
|
|
|
|
|
| Available-for-sale financial assets |
(243) |
|
|
|
(34) |
(50) |
| Loans and receivables due from credit institutions |
(383) |
|
|
|
|
|
| Loans and receivables due from customers |
(3,076) |
|
|
|
|
(185) |
| Held-to-maturity financial assets |
|
|
|
|
|
|
| Amount of impairment determined in accordance with IAS
39 |
(3,702) |
|
|
|
|
|
| Restatement of impairment in accordance with IFRS 9 |
|
|
|
|
34 |
235 |
| Of which restatement of assets reclassified out of the
fair value through profit or
loss category in accordance with IAS 39
|
|
|
|
|
|
|
| Of which restatement of assets reclassified out of the
available-for-sale category
in accordance with IAS 39
|
|
|
|
|
34 |
50 |
| Of which restatement of assets reclassified out of the
loans and receivables category
in accordance with IAS 39
|
|
|
|
|
|
185 |
| Of which restatement of assets reclassified out of the
held-to-maturity category in
accordance with IAS 39
|
|
|
|
|
|
|
| 01.01.2018 |
|
|
|
|
|
|
| Amount of impairment in accordance with IFRS 9 |
|
|
|
|
|
|
|
|
01.01.2018 |
|
|
IFRS 9 - Impairment
reclassifications |
|
|
Financial assets
at fair value through other comprehensive income |
|
|
|
| € million |
Debt instruments at fair value
through other comprehensive income that may be reclassified
to profit or loss
|
Equity instruments at fair value
through other comprehensive income that will not
be reclassified to profit or loss
|
Loans and receivables due from
credit institutions |
Loans and receivables due from
customers |
Debt securities |
| Impairment in accordance with IAS 39 |
|
|
|
|
|
| Central banks |
|
|
|
|
|
| Available-for-sale financial assets |
(3) |
(156) |
|
|
|
| Loans and receivables due from credit institutions |
|
|
(383) |
|
|
| Loans and receivables due from customers |
|
|
|
(2,891) |
|
| Held-to-maturity financial assets |
|
|
|
|
|
| Amount of impairment determined in accordance with IAS
39 |
|
|
|
|
|
| Restatement of impairment in accordance with IFRS 9 |
(5) |
156 |
(24) |
349 |
|
| Of which restatement of assets reclassified out of the
fair value through profit or
loss category in accordance with IAS 39
|
|
|
|
|
|
| Of which restatement of assets reclassified out of the
available-for-sale category
in accordance with IAS 39
|
(5) |
156 |
(24) |
|
|
| Of which restatement of assets reclassified out of the
loans and receivables category
in accordance with IAS 39
|
|
|
|
|
|
| Of which restatement of assets reclassified out of the
held-to-maturity category in
accordance with IAS 39
|
|
|
|
|
|
| 01.01.2018 |
|
|
|
|
|
| Amount of impairment in accordance with IFRS 9 |
(8) |
|
(407) |
(2,542) |
|
The collective provisions registered under IAS 39 show no significant difference
compared
with the provisions for expected losses entered under IFRS 9.
► Provisions sur
engagements de hors bilan
| € million |
31.12.2017 IAS 39 - Amount of provisions |
Restatement of provisions in accordance
with IFRS 9 |
01.01.2018 IFRS 9 - Amount of provisions |
| Financing commitments |
115 |
255 |
370 |
| Guarantee commitments |
106 |
51 |
157 |
| Amount of provisions |
221 |
306 |
527 |
The breakdown between collective impairment and individual impairment under IAS
39
at 31 December 2017 is the following:
► Breakdown of
impairment of financial assets in accordance with IAS 39
|
|
31.12.2017 |
| € million |
Collective impairment |
Individual impairment |
| Amount of impairment in accordance with IAS 39 |
(951) |
(2,751) |
The breakdown of impairment by impairment stages (or buckets) under IFRS 9 at 1
January
is the following:
► Financial assets
|
|
01.01.2018 |
| € million |
Bucket 1 |
Bucket 2 |
Bucket 3 |
| Financial assets at fair value through other comprehensive
income |
(5) |
|
(3) |
| Loans and receivables due from credit institutions |
|
|
|
| Loans and receivables due from customers |
|
|
|
| Debt securities |
(5) |
|
(3) |
| Financial assets at amortised cost |
(134) |
(493) |
(2,323) |
| Loans and receivables due from credit institutions |
(24) |
|
(383) |
| Loans and receivables due from customers |
(108) |
(493) |
(1,940) |
| Debt securities |
(2) |
|
|
| Total |
(139) |
(493) |
(2,326) |
► Engagements
hors bilan
|
|
01.01.2018 |
| € million |
Bucket 1 |
Bucket 2 |
Bucket 3 |
| Financing commitments |
48 |
207 |
115 |
| Guarantee commitments |
10 |
41 |
106 |
| Total |
58 |
248 |
221 |
3.3 FINANCIAL
ASSETS THAT WERE RECLASSIFIED DUE TO THE APPLICATION OF IFRS 9
|
|
31.12.2018 |
|
|
Recognition in accordance
with IFRS 9 |
Recognition in accordance
with IFRS 9 |
| € million |
Carrying amount |
Interest revenues (expenses) recognised |
Fair value |
Gain (loss) recognised in net profit
or loss |
Gain (loss) recognised in other
comprehensive income |
| Financial assets at fair value through profit or loss
reclassified into financial
assets at fair value through other comprehensive income
|
|
|
|
|
|
| Debt instruments at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
|
|
|
|
|
| Equity instruments at fair value through other comprehensive
income that will not
be reclassified to profit or loss
|
|
|
|
|
|
| Financial assets at fair value through profit or loss
reclassified into financial
assets at amortised cost
|
|
|
|
|
|
| Loans and receivables due from credit institutions |
|
|
|
|
|
| Loans and receivables due from customers |
|
|
|
|
|
| Debt securities |
|
|
|
|
|
| Financial assets at fair value through other comprehensive
income reclassified into
financial assets at amortised cost
|
3,880 |
24 |
3,881 |
24 |
32 |
| Loans and receivables due from credit institutions |
|
|
|
|
|
| Loans and receivables due from customers |
|
|
|
|
|
| Debt securities |
3,880 |
24 |
|
24 |
32 |
| Total |
3,880 |
|
3,881 |
24 |
32 |
IMPACT ON EQUITY
OF THE APPLICATION OF IFRS 9 AT 1 JANUARY 2018
|
|
Impact of 1st
application of IFRS at 1 January 2018(1) |
| € million |
Consolidated Shareholders' equity |
Equity-Group share |
Equity- Noncontrolling interests |
| Equity at 31/12/2017 - IAS 39 |
19 045 |
18 940 |
105 |
| Impacts on reserves (A+B+C) |
328 |
328 |
|
| Revaluation related to own credit risk on liabilities
designated at fair value through
profit or loss
|
331 |
331 |
|
| Reclassification from Available-for-sale assets to fair
value through profit or loss
(including cancellation of impairment where applicable; in the case of fair value
hedges, reclassification unhedged portion only)
|
9 |
8 |
|
| Reclassification from Available-for-sale assets to fair
value through other comprehensive
income that will not be reclassified to profit or loss: impact of cancellation of
lasting impairment (where applicable)
|
95 |
95 |
|
| Reclassification from Available-for-sale financial assets
to financial assets at fair
value through other comprehensive income that will not be reclassified to profit or
loss: reclassification of fair value of the hedged portion (where applicable)
|
|
|
|
| Reclassification from amortised cost to fair value through
profit or loss (including
acquisition costs remaining to be amortised; in the case of fair value hedges, reclassification
unhedged portion only)
|
(117) |
(117) |
|
| Assets (to fair value through profit or loss) |
(117) |
(117) |
|
| Liabilities (to fair value through profit or loss) |
|
|
|
| Reclassification from fair value through profit or loss
to fair value through other
comprehensive income that may be reclassified to profit or loss
|
|
|
|
| Reclassification from fair value through profit or loss
to amortised cost (including
fees and commissions remaining to be amortised)
|
|
|
|
| Assets (from fair value through profit or loss - by type
or designated) |
|
|
|
| Liabilities (from fair value through profit or loss -
designated) |
|
|
|
| Impacts on termination of hedges excluding fair value
hedges |
|
|
|
| Recognition of expected credit losses (on financial assets,
assets within the field
of application of IAS 17 and IFRS 15, off-balance sheet commitments)
|
11 |
11 |
|
| Reclassification of equity instruments designated at
fair value through profit or
loss to fair value through other comprehensive income that will not be reclassified
to profit or loss
|
|
|
|
| Impact of changes on financial assets/liabilities measured
at amortised cost |
|
|
|
| Reclassification of designated financial assets applying
the overlay approach |
|
|
|
| Reserves excluding equity-accounted entities (A) |
328 |
328 |
|
| Reserves on equity-accounted entities (B) |
|
|
|
| Reserves on discontinued operations (C) |
|
|
|
| Impacts on other comprehensive income on items that may
be reclassified to profit
or loss (D+E+F)
|
36 |
36 |
|
| Reclassification from Available-for-sale assets to fair
value through profit or loss
(in the case of fair value hedges, reclassification unhedged portion only)
|
(8) |
(8) |
1 |
| Reclassification from Available-for-sale assets to amortised
cost (in the case of
fair value hedges, reclassification unhedged portion only)
|
(16) |
(16) |
|
| Reclassification from amortised cost to fair value through
other comprehensive income
that may be reclassified to profit or loss (in the case of fair value hedges, reclassification
unhedged portion only)
|
|
|
|
| Reclassification of equity instruments from Available-for-sale
assets to fair value
through other comprehensive income that will not be reclassified to profit or loss
|
56 |
56 |
(1) |
| Reclassification from fair value through profit or loss
to fair value through other
comprehensive income that may be reclassified to profit or loss
|
|
|
|
| Impacts on termination of hedges excluding fair value
hedges |
|
|
|
| Recognition of expected credit losses on financial assets
at fair value through other
comprehensive income that may be reclassified to profit or loss
|
4 |
3 |
|
| Reclassification of designated financial assets applying
the overlay approach |
|
|
|
| Other comprehensive income on items that may be reclassified
to profit or loss (net
of income tax) excluding equity-accounted entities (D)
|
36 |
36 |
|
| Other comprehensive income on items that may be reclassified
to profit or loss (net
of income tax) on equity-accounted entities (E)
|
|
|
|
| Other comprehensive income on items that may be reclassified
to profit or loss from
discontinued operations (F)
|
|
|
|
| Impact on other comprehensive income on items that will
not be reclassified to profit
or loss (G+H+I)
|
(483) |
(483) |
|
| Revaluation related to own credit risk on liabilities
designated at fair value through
profit or loss
|
(331) |
(331) |
|
| Reclassification of equity instruments from Available-for-sale
assets to fair value
through other comprehensive income that will not be reclassified to profit or loss
|
(152) |
(152) |
|
| Reclassification of equity instruments designated at
fair value through profit or
loss to fair value through other comprehensive income that will not be reclassified
to profit or loss
|
|
|
|
| Other comprehensive income on items that will not be
reclassified to profit or loss
(net of income tax) excluding equity-accounted entities (G)
|
(483) |
(483) |
|
| Other comprehensive income on items that will not be
reclassified to profit or loss
(net of income tax) on equity-accounted entities (H)
|
|
|
|
| Other comprehensive income on items that will not be
reclassified to profit or loss
from discontinued operations (I)
|
|
|
|
| Total - Impact on equity due to initial application of
IFRS9 |
(119) |
(119) |
|
| Equity at 01/01/2018 - IFRS 9 Standard |
18 926 |
18 821 |
105 |
(1)
Amounts net of income tax.
4. NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: GROUP
ACCOUNTING POLICIES AND PRINCIPLES, ASSESSMENTS AND ESTIMATES APPLIED
1.1 Applicable
standards and comparability
Pursuant to EC Regulation No. 1606/2002, the consolidated financial statements
have
been prepared in accordance with IAS/IFRS and IFRIC applicable at 31 December 2018
and as adopted by the European Union (carve-out version), by using certain exceptions
in the application of IAS 39 on macro-hedge accounting.
This standard is available on the European Commission's website at the following
URL
address: https://ec.europa.eu/ info/business-economy-euro/company-reporting-and-auditing/company-reporting/financial-reporting_en.
The standards and interpretations are the same as those applied and described in
the
Group's financial statements at 31 December 2017.
They have been supplemented by the provisions of those IFRS as endorsed by the
European
Union at 31 December 2018 and that must be applied in 2018 for the first time.
They cover the following:
| Standards, amendments or interpretations |
Date published by the European
Union |
Date of first-time application:
financial years from |
Applicable in the Group |
| IFRS 9 Financial Instruments Replacing IAS 39 - Financial
Instruments: classification
and measurement, impairment and hedge accounting
|
22 November 2016 (EU 2016/2067) |
1 January 2018 |
Yes |
| Amendment to IFRS 4 "Insurance Contracts"/IFRS 9 "Financial
Instruments" Optional
approaches for insurance undertakings to manage the gap between the application of
IFRS 9 and IFRS 4
|
3 November 2017 (EU 2017/1988) |
1 January 2018 |
Yes |
| IFRS 15 "Revenue from contracts with customers" Replacing
IAS 11 on the recognition
of construction contracts and IAS 18 on the recognition of revenue
|
22 September 2016 (EU 2016/1905) |
1 January 2018 |
Yes |
| Amendment to IFRS 15 "Revenue from Contracts with Customers"
Clarifications to IFRS
15
|
31 October 2017 (EU 2017/1987) |
1 January 2018 |
Yes |
| Improvements to IFRS cycle 2014-2016: |
|
|
|
| - IFRS 12 "Disclosure of Interests in Other Entities" |
|
1 January 2017 |
Yes |
| - IAS 28 "Investments in Associates and Joint Ventures" |
(EU 2018/182) |
1 January 2018 |
Yes |
| - IFRS 1 "First-time Adoption of International Financial
Reporting Standards" |
|
1 January 2018 |
No |
| Amendment to IFRS 2 "Classification and Measurement of
Share-based Payment Transactions"
Clarifications to IFRS 2
|
26 February 2018 (EU 2018/289) |
1 January 2018 |
Yes |
| Amendment to IAS 40 "Investment Property" Clarifications
of the principle of transfer,
entry to or exit from the Investment Property category
|
14 March 2018 (EU 2018/400) |
1 January 2018 |
Yes |
| IFRIC 22 "Foreign Currency Transactions and Advance Consideration"
Clarifications
to IAS 21 "Effects of Changes in Foreign Exchange Rates"
|
3 April 2018 (EU 2018/519) |
1 January 2018 |
Yes |
For its accounts from 1 January 2018, Crédit Agricole CIB Group published, for
the
first time, its IFRS financial statements under IFRS 9 Financial Instruments and IFRS
15 Revenue from contracts with customers (see Section 1.2 "Accounting principles and
methods"). IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: recognition
and measurement. It sets new principles governing the classification and measurement
of financial instruments, impairment of credit risk and hedge accounting, excluding
macro-hedging transactions.
IFRS 9 is applied retrospective with a mandatory effective date of 1 January 2018
by adjusting the opening balance sheet on the date of first-time application, with
no restatement of the 2017 comparative financial statements. Consequently, the assets
and liabilities relating to financial instruments 2017 are recognised and measured
applying IAS 39 as described in the accounting policies and principles presented in
the 2017 financial statements.
IFRS 15 Revenue from contracts with customers replaces IAS 11 Construction contracts,
IAS 18 Revenue, and all the interpretations linked to IFRIC 13 Customer loyalty programmes,
IFRIC 15 Agreements for the construction of real estate, IFRIC 18 Transfers of assets
from customers and SIC 31 Revenue - Barter transactions involving advertising services.
For the first application of the IFRS 15 standard, the Crédit Agricole CIB Group
chose
the modified retrospective method without comparing with the level of the 2017 financial
year. The application of IFRS 15 has not had a significant impact on net income and
equity. The application of the amendment to IFRS 12 Disclosure of interests in other
entities, to IFRS 2 Classification and measurement of share-based payment transactions,
to IAS 28 Investments in associates and joint ventures, and interpretation IFRIC 22
Foreign currency transaction and advance consideration, do not have major consequences
for the Group.
Incidentally, as long as the early application of standards and interpretations
adopted
by the European Union is optional for a period, the Group does not apply them, unless
otherwise stated.
This in particular applies to:
| Standards, amendments or interpretations |
Date published by the European
Union |
Date of first-time mandatory application:
financial years from |
Applicable in the Group |
| Amendment to IFRS 9 "Financial Instruments" Options for
early redemption with negative
penalty
|
22 March 2018 (EU 2018/498) |
1 January 2019 (1) |
Yes |
| IFRS 16 "Leases" Replacing IAS 17 on the recognition
of leases |
31 October 2017 (EU 2017/1986) |
1 January 2019 |
Yes |
| IFRIC 23 Uncertainty over Income Tax Treatments Clarification
of IAS 12 on measuring
and recognising a tax asset or liability when there is uncertainty as to the application
of tax legislation
|
23 October 2018 (EU 2018/1595) |
1 January 2019 |
Yes |
(1)
The Group decided to apply the amendment to IFRS 9 early from 1 January 2018.
IFRS 16 "Leases" will replace IAS 17 and all related interpretations (IFRIC 4 "Determining
Whether an Arrangement Contains a Lease", SIC 15 "Operating Leases - Incentives" and
SIC 27 "Evaluating the Substance of Transactions" in the Legal Form of a Lease). It
will apply to reporting periods beginning 1 January 2019.
The main change made by IFRS 16 relates to accounting for lessees. IFRS 16 will
call
for a model in respect of lessees that recognises all leases on the balance sheet,
with a lease liability on the liability side representing commitments over the life
of the lease and on the asset side, an amortisable right-to-use.
Since 2017, the Crédit Agricole CIB Group has taken action to implement IFRS 16
within
the necessary time-frame, incorporating the accounting, finance, risk and purchasing
functions. An initial study of the impact of the implementation of the standard in
the Group was conducted in the second half of 2017 on the basis of the financial statements
at 31 December 2016. All this work continued throughout 2018. The Group finalised
the choice of structural options linked to the interpretation of the standard, chose
the IT solutions needed to process the data for all of the Group's leases and in the
second half estimated the cost impacts on the basis of the financial statements at
31 December 2017.
The Group will apply the modified retrospective method in accordance with paragraph
C5(b) of IFRS 16 recognising the cumulative effect of the initial application on the
date of transition (1 January 2019). Consequently, the Group does not expect IFRS
16 to have a material effect on its total equity. The Group has chosen to use the
two exemptions suggested by the standard, relating to recognition, for the following
leases:
| ― |
short-term leases;
|
| ― |
leases concerning low-value new assets.
|
The standards and interpretations published by IASB at 31 December 2018, but not
yet
adopted by the European Union, are not applied by the Group. They will become mandatory
only as from the date planned by the European Union and have not been applied by the
Group at 31 December 2018.
This concerns IFRS 17 in particular.
IFRS 17 Insurance Contracts will replace IFRS 4. During its meeting of 14 November
2018, the IASB decided to postpone its application date by one year, i.e. to 1 January
2022. It defines new principles in terms of valuation, the recognition of contingent
liabilities under insurance contracts and the appraisal of their profitability, as
well as in terms of presentation. In 2017, a framework for the implementation project
was carried out to identify the issues and impacts of the standard for the Group's
insurance subsidiaries. This work continued in 2018.
In addition, several amendments have been published by the IASB, without any major
issue for the Group, which will apply subject to their adoption by the European Union.
This relates to amendments to IAS 12 Income Taxes, IAS 23 Borrowing costs, IFRS 3/IFRS
11 Business Combinations, IAS 19 Employee Benefits and IAS 28 Investments in Associates
and Joint Ventures applicable as of 1 January 2019, and to an amendment to IAS 1/IAS
8 Presentation of Financial Statements applicable as of 1 January 2020.
1.2 Accounting
policies and principles
Estimates made to draw up the financial statements are by their nature based on
certain
assumptions and involve risks and uncertainties as to whether they will be achieved
in the future.
Future results may be influenced by many factors, including:
| ― |
activity in domestic and international markets;
|
| ― |
fluctuations in interest and exchange rates;
|
| ― |
the economic and political climate in certain industries or countries;
and
|
| ― |
changes in regulations or legislation.
|
This list is not exhaustive.
Accounting estimates based on assumptions are principally used in the following
assessments:
| ― |
financial instruments measured at fair value;
|
| ― |
investments in non-consolidated companies;
|
| ― |
retirement plans and other postemployment benefits;
|
| ― |
stock option plans;
|
| ― |
impairments of loans and of debt securities at amortised cost
or at fair value through
recyclable equity;
|
| ― |
provisions;
|
| ― |
goodwill impairment;
|
| ― |
deferred tax assets;
|
| ― |
deferred profit-sharing.
|
The procedures for the use of assessments or estimates are described in the relevant
sections below.
1.2.1 FINANCIAL
INSTRUMENTS (IFRS 9, IAS 32 AND IAS 32)
♦ Definitions
The IAS 32 standard defines a financial instrument as a contract that gives rise
to
a financial asset of one entity and a financial liability or equity instrument of
another entity, namely a contract representing the rights or obligations to receive
or pay liquid or other financial assets.
Derivative instruments are financial assets or liabilities the value of which evolves
in line with that of an underlying asset, which require little or no initial investment,
and the settlement of which occurs at a future date.
Financial assets and liabilities are treated in the financial statements in accordance
with IAS 9 as endorsed by the European Commission, including for financial assets
held by the Group insurance entities.
The IFRS 9 Standard defines the principles relating to the categorisation and valuation
of financial instruments, the credit risk impairment and hedge accounting, excluding
macro-hedging operations.
We note, however, that Crédit Agricole CIB uses the option of not applying the
IFRS
9 general model of hedging. All of the hedging relationships therefore come under
IAS 39, pending future provisions relating to macro-hedging.
♦ Conventions
for valuing financial assets and liabilities
INITIAL VALUATION
When first recognised, the financial assets and liabilities are valued at their
fair
value as defined by IFRS 13.
The fair value as defined by IFRS 13 corresponds to the price which would be received
for the sale of an asset or paid for the transfer of a liability during a normal transaction
between market participants, on the main market or on the most beneficial market,
on the date of the valuation.
SUBSEQUENT VALUATION
When first recognised, financial assets and financial liabilities are measured
according
to their classification, either at amortised cost based on the effective interest
rate method, or at their fair value as defined by IFRS 13. For derivative instruments,
they are always valued at their fair value.
The amortised cost corresponds to the amount at which the financial asset or financial
liability is valued when first recognised, including the transaction costs directly
attributable to their acquisition or issue, minus principal repayments, plus or minus
the aggregate depreciation calculated using the effective interest method for any
difference (discount or premium) between the initial amount and the amount at maturity.
In the case of a financial asset, the amount is adjusted if necessary for impairment
losses (see paragraph "Provisioning for credit risk").
The effective interest rate is the rate that exactly discounts estimated future
cash
payments or receipts through the expected life of the financial instrument or, when
appropriate, over a shorter period, to obtain the net carrying amount of the financial
asset or financial liability.
♦ Financial assets
CLASSIFICATION
AND MEASUREMENT OF FINANCIAL ASSETS
The non-derivative financial assets (debt or equity instruments) are entered on
the
balance sheet in accounting categories which determine their accounting treatment
and subsequent method of valuation. These financial assets are ranked in one of the
three following categories:
| ― |
financial assets at fair value through profit or loss;
|
| ― |
financial assets at amortised cost;
|
| ― |
financial assets at fair value by equity capital.
|
The criteria for classification and measurement of financial assets depend on the
nature of the financial asset, and which ones are categorised as:
| ― |
debt instruments (i.e. loans and fixed- or determinable-income
securities); or
|
| ― |
equity instruments (i.e. shares).
|
DEBT INSTRUMENTS
The categorisation and valuation of a debt instrument depends on two combined criteria:
the management model and the analysis of the contractual characteristics except for
the use of the fair value option.
The three business
models:
The business model is representative of the strategy followed by Crédit Agricole
CIB
to manage its financial assets and achieve its objectives. The business model is specified
for a portfolio of assets and does not constitute an intention on a case by case basis
for an isolated asset.
We distinguish three management models:
| ― |
the collection only model where the intention is to collect the
contractual cash flows
over the life of the asset; this model does not systematically involve holding all
assets until their contractual maturity. There is, however, a strict framework for
asset sales;
|
| ― |
the mixed model, where the objective is to collect the cash flows
over the life of
the asset and to sell it. In this model, both the sale of financial assets and the
collection of the cash flows are essential; and
|
| ― |
the pure disposal model, the main objective of which is to dispose
of the assets.
|
It concerns the portfolios which are held for the purpose of collecting cash via
disposals,
portfolios the performance of which has appreciated on the basis of their fair value
and portfolios of financial assets held for trading.
The contractual
terms (the "Solely Payments of Principal and Interest" or "SPPI" test):
The "SPPI" test combines a set of criteria, examined cumulatively, to establish
whether
contractual cash flows meet the characteristics of simple financing (principal repayments
and interest payments on the remaining amount of principal due).
The test is satisfied when financing gives a right only to the repayment of principle
and where the payment of interest reflects the time value of money, the credit risk
associated with the instrument, the other costs and risks of a classic loan contract
and a reasonable margin, whether the interest rate be fixed or variable.
In simple financing, interest represents the cost of the passage of time, the price
of credit and liquidity risk over the period, and other components related to the
cost of carrying the asset (e.g. administrative costs).
In some cases, when qualitative analysis of this nature does not allow a conclusion
to be made, quantitative analysis (or benchmark testing) is carried out. This additional
analysis consists of comparing the contractual cash flows of the asset under review
with the cash flows of a benchmark asset.
If the difference between the cash flows of the financial asset and the benchmark
asset is considered immaterial, the asset is deemed to be simple financing.
Moreover, specific analysis is conducted when the financial asset is issued by
special
purpose entities establishing a priority order of payment among the holders of the
financial assets by contractually linking multiple instruments and creating concentrations
of credit risk ("tranches").
Each tranche is assigned a rank of subordination that specifies the order of distribution
of cash flows generated by the structured entity. In this case, the "SPPI" test requires
an analysis of the characteristics of the contractual cash flows of the asset concerned
and of the underlying assets according to the "look through" approach and of the credit
risk borne by the tranches subscribed compared with the credit risk of the underlying
assets.
The accounting method of the debt instruments resulting from the qualification
of
the management model combined with the "SPPI" test can be presented in the form of
the diagram, below:
► Debt instrument
|
|
|
BUSINESS MODELS |
|
|
|
COLLECTION ONLY |
MIXED |
SELLING ONLY |
| SPPI TEST |
SATISFIED |
Amortised cost |
Fair value through other comprehensive income (items
that can be reclassified) |
Fair value through profit or loss |
|
|
NON SATISFIED |
Fair value through profit or loss |
Fair value through profit or loss |
Fair value through profit or loss |
Debt instruments
at amortised cost
Debt instruments are valued at the amortised cost if they are eligible for the
collection
model and if they respect the "SPPI" test. They are recorded on the date of settlement
/ delivery and their initial valuation also includes coupons accrued and transaction
costs. This category of financial assets is subject to impairment under the conditions
described in the specific paragraph "Provisions for credit risk".
Debt instruments
at fair value by recyclable equity
Debt instruments are assessed at fair value by recyclable equity if they are eligible
for the mixed model and if they respect the "SPPI" test. They are recorded on the
trading date and their initial valuation also includes coupons accrued and transaction
costs. Amortisation of any premiums or discounts and transaction costs on fixed-income
securities is recognised in the income statement using the effective interest rate
method.
These financial assets are subsequently valued at their fair value and the variations
in fair value are entered under recyclable equity against the outstanding account
(excluding interest incurred accounted for in profit and loss using the effective
interest rate method).
In the case of a disposal, these variations are transferred to profit or loss.
This category of financial instruments is subject to impairment under the conditions
described in the specific paragraph "Provisions for credit risk" (without affecting
the fair value on the balance sheet).
Debt instruments
at fair value by profit or loss
Debt instruments are valued at fair value by profit or loss in the following circumstances:
| ― |
the instruments are placed in portfolios made up of financial
assets held for trading
or the main objective of which is disposal;
|
Financial assets held for trading are assets acquired or generated by the company
mainly with a view to short term sale or which are part of a portfolio of instruments
jointly managed with a view to generating a profit linked to short term price fluctuations
or arbitrage. Although contractual cash flows are received during the time during
which Crédit Agricole CIB holds the assets, the receipt of these contractual cash
flows is not essential but accessory.
| ― |
debt instruments which do not respect the criteria of the "SPPI"
test. Notably the
case of UCITS;
|
| ― |
financial instruments in portfolios, for which the entity opts
for fair value valuation
in order to reduce an accounting treatment difference in the income statement. In
this case, it is a categorisation at fair value through profit and loss.
|
Financial assets at fair value through profit or loss are initially entered at
fair
value, excluding transaction costs (directly entered under profit or loss) and including
coupons incurred.
They are subsequently valued at their fair value and the changes in fair value
are
recognised under profit and loss, Net Banking Income (NBI), against the outstanding
balance.
This category of financial assets is not subject to impairment. Debt instruments
at
fair value by profit or loss by nature are recorded on the date of settlement / delivery.
Debt instruments at fair value by profit or loss as an option are recorded on the
trading date.
EQUITY INSTRUMENTS
Equity instruments are by default entered at fair value by profit or loss, except
as an irrevocable option for a categorisation at fair value by non-recyclable equity,
providing these instruments are not held-for-trading.
Equity instruments
at fair value through profit and loss
Financial assets at fair value through profit or loss are initially entered at
fair
value, excluding transaction costs (directly entered under profit or loss). They are
entered on the settlement / delivery date.
They are subsequently valued at their fair value and the changes in fair value
are
recognised under profit and loss, Net Banking Income (NBI), against the outstanding
account.
This category of financial assets is not subject to impairment.
Capital instruments
at fair value by non-recyclable equity (as irrevocable option)
The irrevocable option to enter equity instruments at fair value by non-recyclable
equity is taken at the transactional level (line by line) and is applied from the
initial date of accounting. These securities are registered on the trading date.
Initial fair value includes securities trading costs.
During subsequent valuations, the variations in fair value are accounted in non-recyclable
equity. If sold, these variations are not recycled under profit or loss, the income
from the sale is entered under equity.
Only dividends are recognised in profit or loss.
RECLASSIFICATION
OF FINANCIAL ASSETS
In the case of a significant change of economic model in the management of financial
assets (new activity, acquisition of entities, sale or discontinuation of a significant
activity), a reclassification of these financial assets is necessary. The reclassification
applies to the total financial assets of the portfolio from the date of reclassification.
In the other cases, the management model remains unchanged for the existing financial
assets. If a new management model is identified, it is applied from then on to the
new financial assets, re-grouped in a new management portfolio.
TEMPORARY ACQUISITION
AND DISPOSAL OF SECURITIES
Temporary disposals of securities (loans of securities, securities delivered under
repurchase agreements) do not generally meet derecognition requirements.
Securities lent or sold under repurchase agreements remain on the balance sheet.
In
the case of securities sold under repurchase agreements, the amount collected, representing
the debt vis-à-vis the transferee, is entered under balance sheet liabilities by the
transferor. Securities borrowed or bought under repurchase agreements are not recognised
on the balance sheet of the transferee.
In the case of securities purchased under resale agreements, a receivable vis-à-vis
the transferor is entered on the balance sheet of the transferee against the amount
paid. If the security is subsequently sold, the transferee recognises a liability
measured at fair value in respect of their obligation to return the security under
the repurchase agreement.
Securities sold and purchased under repurchase agreements are recognised at fair
value
through profit or loss when they are part of trading operations (a managed operation,
the performance of which is valued on the basis of fair value), and otherwise at the
amortised cost.
DERECOGNITION
OF FINANCIAL ASSETS
Financial assets (or a group of financial assets) are fully or partially derecognised:
| ― |
when the contractual rights to the cash flows from the financial
asset expire;
|
| ― |
or when they are transferred or are deemed to have been transferred
because they belong
de facto to one or more beneficiaries and when the near totality all the risks and
rewards of ownership in the financial asset are transferred.
|
In this case, any rights or obligations created or retained at the time of transfer
are recognised separately as assets and liabilities. If the contractual rights to
the cash flows are transferred, but some of the risks and rewards of ownership as
well as control are retained, the financial assets continue to be recognised to the
extent of the Group's continuing involvement in the asset.
Financial assets renegotiated for commercial reasons without financial difficulties
of the counterparty and with the aim of developing or keeping a commercial relationship
are derecognised at the date of the renegotiation. The new loans granted to clients
are entered on this date at their fair value on the renegotiation date. The subsequent
accounting treatment depends on the management model and the "SPPI" test.
Subsidies from the state are recorded under profit or loss under the heading Interest
and Related Income and spread over the lifespan of the corresponding loans, in accordance
with IAS 20.
♦ Financial liabilities
CLASSIFICATION
AND MEASUREMENT OF FINANCIAL LIABILITIES
Financial liabilities are classified on the balance sheet in the following two
accounting
categories:
| ― |
financial liabilities at fair value through profit or loss, by
nature or option;
|
| ― |
financial liabilities at amortised cost.
|
FINANCIAL LIABILITIES
AT FAIR VALUE THROUGH PROFIT AND LOSS BY NATURE
Financial instruments issued mainly with a view to being repurchased in the short
term, instruments which are part of a portfolio of identified financial instruments
which are managed together and which present indications of recent short term profit
taking (with the exception of certain hedging derivatives), and derivatives are valued
at fair value through profit and loss.
The variations in fair value of this portfolio are entered against the income statement.
FINANCIAL LIABILITIES
AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial liabilities which meet one of the three criteria defined by the standard
may be valued at fair value by profit or loss: for hybrid issues including one or
several separable embedded derivatives, with a view to reducing or eliminating accounting
treatment distortion, or in the case of groups of managed financial liabilities, the
performance of which is measured at fair value.
This option is irrevocable and must apply to the initial accounting date of the
instrument.
During subsequent valuations, these financial liabilities are valued at fair value
against profit or loss for changes in fair value not related to its own credit risk
and against non-recyclable equity for changes in value related to its own credit risk,
except if this distorts the accounting treatment.
Crédit Agricole CIB's structured issues are classified as financial liabilities
designated
at fair value through profit or loss. These liabilities are part of portfolios of
assets and liabilities that are managed at fair value and whose performance is measured
on the basis of fair value.
In accordance with IFRS 13, their recognition at fair value includes the changes
in
the Group's issuer credit risk.
FINANCIAL LIABILITIES
AT AMORTISED COST
All the other liabilities meeting the definition of a financial liability (excluding
derivatives) are valued at the amortised cost.
These liabilities are initially measured at fair value (including transaction income
and costs) and subsequently at amortised cost using the effective interest method.
RECLASSIFICATION
OF FINANCIAL LIABILITIES
The initial classification of financial liabilities is irrevocable. No subsequent
reclassification is authorised.
Only cases of re-qualification (debt instrument versus equity capital) may occur.
DISTINCTION BETWEEN
LIABILITIES AND EQUITY
Securities are classed as debt instruments or equity instruments based on the economic
substance of the contractual terms.
A financial liability is a debt instrument if it includes a contractual obligation
to:
| ― |
remit cash, another financial asset or a variable number of equity
instruments to
another entity; or
|
| ― |
to exchange financial assets and liabilities with another entity
under potentially
unfavourable conditions.
|
An equity instrument is a non-reimbursable financial instrument that offers a discretionary
return, represents a residual interest in a company's net assets after deducting liabilities
and is not qualified as a debt instrument.
DERECOGNITION
AND MODIFICATION OF FINANCIAL LIABILITIES
A financial liability is fully or partially derecognised:
| ― |
when it expires; or
|
| ― |
when quantitative and qualitative analyses suggest it has undergone
a substantial
change following restructuring.
|
A substantial modification of an existing financial liability must be recorded
as
an extinction of the initial financial liability and the accounting of a new financial
liability (novation). Any differential between the carrying amount of the liability
extinguished and the new liability will be immediately recorded in the income statement.
If the financial liability is not derecognised, the original effective interest rate
is kept. A discount / premium is entered immediately on the income statement with
the date of the modification and then is subject to a staggering at the original EIR
over the residual lifespan of the instrument.
♦ Provisioning
for credit risk
FIELD OF APPLICATION
In accordance with IFRS 9, Crédit Agricole CIB recognises a value correction for
the
Expected Credit Losses (ECL) on the following outstandings:
| ― |
the financial assets of debt instruments entered at the amortised
cost or at fair
value by recyclable equity (loans and receivables, debt securities);
|
| ― |
the financing commitments which are not valued at fair value
through profit or loss;
|
| ― |
guarantee commitments under IFRS 9 and which are not measured
at fair value through
profit or loss;
|
| ― |
rental receivables under IAS 17; and
|
| ― |
trade receivables generated by transactions under IFRS 15.
|
Equity capital instruments (at fair value by profit or loss or at fair value by
non-recyclable
OCI) are not concerned by impairment arrangements.
The derivative instruments and the other fair value instruments against profit
or
loss are subject to a counterparty risk calculation which is not covered by the ECL
model. This calculation is described in Chapter 5 "Risk factors and Pillar 3" of the
Crédit Agricole CIB Registration Document.
CREDIT RISK AND
PROVISIONING STAGES
The credit risk is defined as the risk of losses linked to the default of a counterparty
making it unable to meet its commitments vis-à-vis the Group.
The credit risk provisioning process has three stages (Buckets):
| ― |
first stage (Bucket 1): upon initial recognition of the financial
instrument (credit,
debt security, guarantee, etc.), the entity recognises the credit losses expected
over 12 months;
|
| ― |
second stage (Bucket 2): if the quality of credit deteriorates
significantly for a
given transaction or portfolio, the entity recognises the expected losses at maturity;
|
| ― |
third stage (Bucket 3): at a later date, once one or more default
events have occurred
on the transaction or on a counterparty having an adverse effect on the estimated
future cash flows, the entity recognises credit losses expected at maturity. Subsequently,
if the conditions for classifying the financial instruments in Bucket 3 are no longer
respected, the financial instruments are re-classified in Bucket 2, then in Bucket
1 according to the subsequent improvement of the quality of credit risk.
|
Definition of
default
The definition of default for the ECL provisioning requirements is identical to
that
used in management and for the calculations of regulatory ratios. A debtor is, therefore,
considered to be in default when at least one of the following conditions has been
met:
| ― |
a payment is generally more than ninety days past due, unless
specific circumstances
point to the fact that the delay is due to reasons beyond the debtor's control;
|
| ― |
the entity believes that the debtor is unlikely to settle its
credit obligations unless
it avails itself of certain measures such as the provision of collateral surety.
|
The definition of "default" is applied uniformly to all financial instruments,
unless
information becomes available indicating that another definition is more appropriate
for a particular financial instrument.
An amount in default (Bucket 3) is said to be impaired when one or more events
have
occurred which have a negative effect on future estimated cash flows of this financial
asset. The impairment indications of a financial asset include the observable data
relating to the following events:
| ― |
significant financial difficulties of the issuer or borrower;
|
| ― |
a breach of an agreement, such as a default or late payment;
|
| ― |
the awarding, by the lenders to the borrower, for economic or
contractual reasons
linked to the financial difficulties of the borrower, of one or several favours which
the lenders would not have envisaged in other circumstances;
|
| ― |
the increasing probability of bankruptcy or of the financial
restructuring of the
borrower;
|
| ― |
the disappearance of an active market for the financial asset
due to financial difficulties;
|
| ― |
the purchase or the creation of a financial asset with a large
discount, which reflects
the credit losses suffered.
|
It is not necessarily possible to isolate a particular event, the impairment of
the
financial asset could be the result of the combined effect of several events.
The defaulting counterparty only returns to a healthy situation after complete
regularisation
of the delay noted and of any other elements triggering the default (lifting of the
default for the parent company, lifting of an alert which caused the default, etc.).
The notion of
"ECL"
ECL is defined as the weighted expected probable value of the discounted credit
loss
(principal and interest). It represents the present value of the difference between
the contractual cash flows and the cash flows deemed recoverable (including principal
and interest).
The ECL approach aims to anticipate, as much as possible, accounting for expected
credit losses.
GOVERNANCE AND
MEASUREMENT OF ECL
The governance of the mechanism for measuring IFRS 9 parameters is based on the
organisation
put in place as part of the Basel mechanism. The Group Risks Department is responsible
for defining the methodological framework and for the supervision of the mechanism
for provisioning outstanding amounts.
The Group prioritises the internal ratings mechanism and the current Basel processes
in order to generate the IFRS 9 parameters necessary for the calculation of ECL. The
assessment of the evolution of the credit risk is based on a model of expected losses
and extrapolation on the basis of reasonable scenarios. All the available, pertinent,
reasonable and justifiable information, including forward looking information, must
be used.
The formula includes the probability of default, loss given default and exposure
at
default parameters.
These calculations are broadly based on the internal models used as part of the
regulatory
framework, but with adjustments to determine an economic ECL. IFRS 9 recommends a
Point in Time analysis while having regard to historical loss data and forward looking
macro-economic data, whereas the regulatory perspective is analysed Through The Cycle
for probability of default and in a downturn for loss given default.
The accounting approach also requires the recalculation of certain Basel parameters,
in particular to eliminate internal recovery costs or floors that are imposed by the
regulator in the regulatory calculation of loss given default (LGD).
The methods of calculating ECL depend on the types of products: financial instruments
and off-balance sheet instruments.
Credit losses expected for the next 12 months are a portion of the credit losses
expected
for the lifespan, and they represent cash flow deficiencies for the lifespan resulting
from a default in the 12 months following the reporting date (or a shorter period
if the expected lifespan of the financial instrument is lower than 12 months), weighted
by the probability of a default.
The expected credit losses are discounted at the effective interest rate determined
during the initial accounting of the financial instrument.
The IFRS 9 parameters are measured and updated according to the methodologies defined
by the Group and thus make it possible to establish an initial level of reference,
or shared base, for provisioning.
Backtesting of models and parameters used is carried out at least on a yearly basis.
Forward looking macro-economic data are taken into account in a methodological
framework
which is applicable on two levels:
| ― |
at the Group level in the determination of a shared framework
for taking into account
forward looking data in the projection of PD and LGD parameters regarding the amortisation
of operations;
|
| ― |
at the level of each entity with regard to its own portfolios.
|
SIGNIFICANT DETERIORATION
OF THE CREDIT RISK
All Group entities must assess, for each financial instrument, the deterioration
of
the credit risk from inception to each closing date. This assessment of the evolution
of the credit risk leads entities to classify their operations by class of risk (Buckets).
In order to assess significant deterioration, the Group has a process based on
2 levels
of analysis:
| ― |
a first level based on relative and absolute rules and criteria
applying to Group
entities;
|
| ― |
a second level linked to the assessment by an expert, with local
forward looking data,
of the risk carried by each entity on its portfolios which may lead to an adjustment
of the Group criteria for declassifying in Bucket 2 (switch of portfolio or sub- portfolio
in ECL at maturity).
|
Every financial instrument, without exception, is monitored for significant deterioration.
No contagion is required for the move from Bucket (1) to Bucket (2) of the financial
instruments of the same counterparty. The monitoring of the significant deterioration
must involve looking at the evolution of the credit risk of the principal debtor without
taking into account the guarantee, including for operations benefiting from a shareholder
guarantee.
Possible losses in respect of portfolios of small loans with similar characteristics
may be estimated on a statistical basis rather than individually assessed.
In order to measure the significant deterioration of the credit risk since the
initial
recognition, it is necessary to take account of the internal rating and the PD (probability
of default) at the outset. Inception is understood to be the trading date, when the
entity becomes party to the contractual provisions of the financial instrument. For
financing and guarantee commitments, inception is understood to be the date of irrevocable
commitment.
For amounts outstanding (with the exception of securities) for which internal ratings
mechanisms have been built (in particular exposures monitored with authorised methods),
the Crédit Agricole group considers that all information incorporated into the ratings
mechanisms enables a more relevant assessment than just the criteria of arrears of
over 30 days.
If the deterioration from inception ceases to be registered, the depreciation may
be expressed as expected losses at 12 months (Bucket 1).
In order to compensate for the fact that certain factors or indicators of significant
deterioration are not identifiable at the level of a financial instrument taken in
isolation, the regulation authorises the assessment of the significant deterioration
for portfolios, groups of portfolios or portions of portfolios of financial instruments.
The constitution of portfolios for an assessment of loans collectively assessed for
impairment may result from common characteristics such as:
| ― |
type of instrument;
|
| ― |
internal credit risk rating;
|
| ― |
type of guarantee;
|
| ― |
date of initial accounting;
|
| ― |
term left until maturity;
|
| ― |
sector of activity;
|
| ― |
geographic location of the borrower;
|
| ― |
the value of the asset allocated as a guarantee in relation to
the financial assets,
if this has an effect on the probability of default (for example, in the case of loans
only guaranteed by real security in certain countries, or on the financing ratio);
|
| ― |
the distribution channel, the object of the financing, etc.
|
The grouping of financial instruments for the purposes of assessing the credit
risk
variations on a collective basis may change over time, as new information becomes
available.
For securities, Crédit Agricole CIB uses the approach which consists of applying
an
absolute level of credit risk, in accordance with IFRS 9, below which exposures are
classified in Bucket 1 and provisions are made based on 12-month ECL.
The following rules will apply for the monitoring of the significant deterioration
of securities:
| ― |
"Investment Grade" rated securities, at the date of closing,
will be classified in
Bucket 1 and provisioned on the basis of an ECL at 12 months;
|
| ― |
securities rated "Non-Investment Grade" (NIG), at the date of
closing, must be monitored
for significant deterioration, from inception and be classified in Bucket 2 (ECL at
maturity) in the case of significant deterioration of the credit risk.
|
The relative deterioration must be assessed prior to the occurrence of a confirmed
default (Bucket 3).
RESTRUCTURING
DUE TO FINANCIAL DIFFICULTIES
Debt instruments restructured due to financial difficulties are those for which
the
entity changed the initial financial terms (interest rate, maturity) for economic
or legal reasons connected with the borrower's financial difficulties, in a manner
that would not have been considered under other circumstances. Thus, it relates to
all debt instruments, whatever the classification of the instrument, according to
the deterioration of the credit risk observed since the initial recognition.
In accordance with the definition of the EBA (European Banking Authority) specified
in the risk factors section, loan restructuring corresponds to all of the modifications
to one or more loan contracts, and to the refinancing granted due to the financial
difficulties encountered by the client.
This notion of restructuring must be assessed at the level of the contract and
not
at the client level (no contagion).
The definition of loans and receivables restructured due to financial difficulties
therefore involves two cumulative criteria:
| ― |
modifications to contract or refinancing of receivables;
|
| ― |
a client in a difficult financial situation.
|
Examples of the circumstances under which "modification of contract" apply:
| ― |
there is a difference, in favour of the borrower, between the
modified contract and
the conditions existing prior to the contract;
|
| ― |
the modifications made to the contract lead to more favourable
conditions for the
borrower concerned than other borrowers would have been able to obtain, at the same
time, from a bank with a similar risk profile.
|
"Refinancing" refers to situations in which a new debt is granted to the client
in
order to enable them to totally or partially repay another debt whose contractual
conditions they cannot support due to their financial position.
A loan restructuring (whether or not in default) indicates a presumption of the
existence
of a risk of confirmed loss (Bucket 3).The need to record an impairment on the restructured
exposure must therefore be analysed accordingly (a restructuring does not systematically
cause an impairment for losses and a default classification).
The qualification of "restructured receivable" is temporary.
As soon as the restructuring operation in the EBA sense has been carried out, the
exposure maintains this status of "restructured" for a period of at least two years
if the exposure was healthy at the time of the restructuring, or three years if the
exposure was in default at the time of the restructuring. These periods are extended
if certain events occur, covered by Group regulations (new incidents, for example).
In the absence of derecognition, the reduction of future flows granted to a counterparty,
or the postponing of these flows as part of a restructuring, results in the recognition
of a discount to the cost of risk.
The calculation of the restructuring discount is equal to the difference between:
| ― |
the carrying amount of the receivable;
|
| ― |
And the sum of future "restructured" flows, updated at the original
effective interest
rate.
|
In the case of the abandonment of part of the capital, this amount constitutes
a loss
to be entered under cost of risk.
When this discount is included, the portion due to the effect of the passage of
time
is entered under "Net banking income".
UNCOLLECTIBILITY
When a receivable is considered to be uncollectable, i.e. there is no longer any
hope
of recovering even part of it, the amount considered to be uncollectable is derecognised
from the balance sheet and written off.
Decisions as to when to write off are taken on the basis of expert opinion. The
Crédit
Agricole CIB Risk Management department determines this, having regard to its business
knowledge. Before any write-off, a Bucket 3 provision will have to have been made
(with the exception of assets at fair value through profit or loss).
For loans at amortised cost or at fair value by recyclable equity, the amount written
off is entered under cost of risk for the principal and "Net banking income" for interest.
♦ Financial instrument
derivatives
CATEGORISATION
AND EVALUATION
Derivative instruments are financial assets or liabilities categorised by default
under derivative instruments held-for-trading unless they can be qualified as hedging
derivatives.
They are entered on the balance sheet for their initial fair value on the trading
date.
They are subsequently valued at their fair value.
On each closing date, the counterpart of changes in fair value of derivatives on
the
balance sheet is entered:
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under profit or loss if they are derivative instruments held
for trading or fair value
hedging;
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under equity if they are cash flow hedges or a net investment
in an activity abroad,
for the effective part of the hedge.
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HEDGE ACCOUNTING
General background
In accordance with the Group decision, Crédit Agricole CIB does not apply the IFRS
9 "hedge accounting" section, in line with the option offered by the regulation. All
hedging relationships are documented under IAS 39 rules, at latest up to the date
of application of the text on macro fair value hedges, when it is adopted by the European
Union. However, the eligibility of financial instruments for hedge accounting under
IAS 39 takes into account the classification and valuation principles of the financial
instruments of Standard IFRS 9.
Under IFRS 9, and given the hedging principles of IAS 39, debt instruments at amortised
cost and at fair value by recyclable equity are eligible for fair value hedges and
cash flow hedges.
Documentation
Hedging relationships must respect the following principles:
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fair value hedges are intended to provide protection from exposure
to a change in
the fair value of an asset or of a liability that has been recognised, or of a firm
commitment that has not been recognised, attributable to the risk(s) hedged and which
may affect the profit or loss (for example, coverage of all or part of the variations
in fair value due to the interest rate risk of a fixed rate loan);
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cash flow hedges aim to provide protection from an exposure to
the variations in future
cash flow of an asset or liability accounted for, or of a highly likely planned transaction,
attributable to the risks hedged and which could (in the case of a transaction planned
but not carried out) affect the profit or loss (for example, coverage of variations
of all or part of future interest payments on a variable rate loan);
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hedges of net investments in a foreign operation are intended
to provide protection
from the risk of an adverse movement in the fair value arising from the foreign exchange
risks associated with a foreign investment in a currency other than the Euro, the
currency which Crédit Agricole CIB reports in.
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Hedges must also meet the following criteria in order to be eligible for hedge
accounting:
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the hedging instrument and the instrument hedged must be eligible;
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there must be formal documentation from inception, primarily
including the individual
identification and characteristics of the hedged item, the hedging instrument, the
nature of the hedging relationship and the nature of the hedged risk; and
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the effectiveness of the hedge must be demonstrated, at inception
and retrospectively,
by testing at each reporting date.
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For interest rate hedges for a portfolio of financial assets or financial liabilities,
Crédit Agricole S.A. Group documents the hedging relationship for fair value hedges
in accordance with the carve-out version of IAS 39 as endorsed by the European Union.
Namely:
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the Group documents these hedging relationships based on its
gross position in derivative
instruments and hedged items;
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the effectiveness of the hedging relationships is measured by
maturity schedules.
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Details of the Group risk management strategy and its application are in Section
5
"Risk factors and Pillar 3".
Valuation
The accounting entry for the revaluation of the derivative at its fair value is
carried
out in the following manner:
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fair value hedges: the change in value of the derivative is recognised
in the income
statement symmetrically with the change in value of the hedged item in the amount
of the hedged risk. Only the net amount of any ineffective portion of the hedge is
recognised in the income statement;
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cash flow hedges: the change in value of the derivative is recognised
in the balance
sheet through a specific account in other comprehensive income for the efficient portion
and any inefficient portion of the hedge is recognised in the income statement. Any
profits or losses on the derivative accrued through other comprehensive income are
then recycled in the income statement when the hedged cash flows occur;
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hedging of net investments in a foreign activity: the change
in value of the Derivative
is recognised in the balance sheet through translation differences in the equity account
and the inefficient portion of the hedge is recognised in the income statement.
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Where the conditions for benefiting from hedge accounting are no longer met, the
following
accounting treatment must be applied from then on:
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fair value hedges: only the hedging instrument continues to be
revalued through profit
or loss. The hedged item is wholly accounted for according to its classification.
For debt instruments at fair value by recyclable equity, fair value variations after
the end of the hedging relationship are entirely entered under equity. For hedged
items valued at amortised cost, which were interest rate hedged, the revaluation adjustment
is amortised over the remaining life of those hedged items;
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cash flow hedges: the hedging instrument is valued at fair value
through profit or
loss. The amounts accumulated in other comprehensive income under the effective portion
of the hedging remain in other comprehensive income until the hedged element affects
profit or loss. For interest rate hedged instruments, profit or loss is affected according
to the payment of interest. The revaluation adjustment is therefore amortised over
the remaining life of those hedged items;
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hedges of a net investment in a foreign operation: the amounts
accumulated in other
comprehensive income under the effective portion of the hedging remain in other comprehensive
income while the net investment is held. The income is recorded once the net investment
in a foreign operation exits the scope of consolidation.
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EMBEDDED DERIVATIVES
An embedded derivative is a component of a hybrid contract that meets the definition
of a derivative product. This designation only applies to financial liabilities and
non-financial contracts. Embedded derivatives must be accounted for separately from
the host contract if the following three conditions are met:
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the hybrid contract is not measured at fair value through profit
or loss;
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the embedded component taken separately from the host contract
meets the definition
of a derivative;
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the characteristics of the derivative are not closely related
to those of the host
contract.
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♦ Determination
of the fair value of financial instruments
The fair value of financial instruments is measured by maximising the use of observable
input data. It is presented following the hierarchy defined in IFRS 13.
IFRS 13 defines fair value as the price that would be received to sell an asset
or
paid to transfer a liability in an ordinary transaction between market participants,
on the principal or the most advantageous market, at the measurement date.
The fair value applies separately to each financial asset and each financial liability.
A portfolio exemption may be used where the management and risk monitoring strategy
so allow and are appropriately documented. Hence, when a group of financial assets
and liabilities are managed on a net exposure basis to market and credit risks, some
parameters of the fair value are calculated on a net basis. This is the case for the
CVA/DVA calculation described in Section 5 "Risk factors and Pillar 3". Crédit Agricole
CIB considers that the best evidence of fair value is quoted prices published in an
active market.
In the absence of such prices, fair value is determined by the application of valuation
techniques which maximise the use of pertinent observable data and minimise the use
of non-observable data. When a debt is valued at fair value through profit or loss
(naturally or as an option), the fair value takes into account the issuer's own credit
risk.
FAIR VALUE OF
STRUCTURED ISSUES
In accordance with IFRS 13, Crédit Agricole CIB values its structured issues, recognised
at fair value, by taking as a reference the issuer spread that specialist participants
agree to receive to acquire new Group issues.
COUNTERPARTY RISK
ON DERIVATIVE INSTRUMENTS
Crédit Agricole CIB incorporates into the fair value the assessment of counterparty
risk for derivative assets (Credit Valuation Adjustment - CVA) and, using a symmetrical
treatment, the non-performance risk for derivative liabilities (Debit Valuation Adjustment
or DVA or own credit risk).
The CVA makes it possible to determine the expected losses due to the counterparty
from the perspective of Crédit Agricole CIB Group, and DVA the expected losses due
to Crédit Agricole CIB Group from the perspective of the counterparty.
The CVA/DVA is calculated on the basis of an estimate of expected losses based
on
the probability of default and loss given default. The methodology used maximises
the use of observable market inputs. It is primarily based on market parameters such
as registered and listed Credit Default Swaps (CDS) (or Single Name CDS) or proxy
CDS.
COSTS AND BENEFITS
RELATED TO THE FUNDING OF DERIVATIVES
The value of non-collateralised or partially collateralised derivative instruments
incorporates a Funding Valuation Adjustment (FVA) that represents costs and benefits
related to the financing of these instruments. This adjustment is measured based on
positive or negative future exposure of transactions for which a cost of financing
is applied.
FAIR VALUE HIERARCHY
The standard classifies fair value into three levels based on the observability
of
inputs used in valuation techniques.
Level 1: fair
value corresponding to quoted prices (non-adjusted) in active markets
Level 1 is composed of financial instruments that are directly quoted in active
markets
for identical assets and liabilities that the entity can access at the measurement
date. This applies primarily to shares and bonds listed in an active market (such
as the Paris Stock Exchange, the London Stock Exchange, the New York Stock Exchange,
etc.), units of investment funds listed in active markets and derivatives contracted
in an organised market, especially futures contracts.
A market is regarded as being active if quoted prices are readily and regularly
available
from an exchange, broker, dealer, pricing service or regulatory agency, and those
prices represent actual and regularly occurring market transactions on an arm's length
basis. When current prices of financial instruments are unavailable at the reporting
date, Crédit Agricole CIB refers to the price of the most recent transactions involving
the financial instrument.
For financial assets and liabilities with offsetting market risks, Crédit Agricole
CIB uses mid-prices as a basis for establishing fair values for the offsetting risk
positions. The Group applies the current bid price to asset held or liability to be
issued (open long position) and the current asking price to asset to be acquired or
liability held (open short position).
Level 2: fair
values measured using directly or indirectly observable inputs other
than those in Level 1
These data can be observed either directly (i.e. prices) or indirectly (derived
from
price data) and generally meet the following characteristics: they are non-entity-specific
data that are publicly available or accessible and based on a market consensus. Level
2 is composed of:
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stocks and bonds quoted in an inactive market or non-quoted in
an active market but
for which fair value is established using a valuation methodology typically used by
market participants (such as discounted cash flow techniques or the Black & Scholes
model) and based on observable market data;
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instruments that are traded over the counter, the fair value
of which is measured
with models using observable market data, i.e. derived from various and independent
available external sources which can be obtained on a regular basis. For example,
the fair value of interest rate swaps is generally derived from the yield curves of
market interest rates as observed at the reporting date.
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When the models are consistent notably with standard models based on observable
market
data (such as interest rate yield curves or implied volatility surfaces), the day
one gain or loss resulting from the initial fair value measurement of the related
instruments is recognised in profit or loss at inception.
Level 3: fair
value that is measured using significant unobservable inputs
For some complex instruments that are not traded in an active market, fair value
measurement
is based on valuation techniques using assumptions i.e. that cannot be observed on
the market for an identical instrument. These instruments are disclosed within Level
3.
This mainly concerns complex interest rate instruments, equity derivatives, structured
credit instruments which fair value measurement includes for instance correlation
or volatility inputs that are not directly benchmarkable.
Since the transaction price is deemed to reflect the fair value at initial recognition,
any day one gain or loss recognition is deferred. The margin earned on these structured
financial instruments is generally recognised in profit or loss by spreading over
the duration during which the parameters are considered unobservable. When market
data become "observable", the remaining margin to be spread is immediately recognised
in profit or loss. Valuation methodologies and models used for financial instruments
that are disclosed within Levels 2 and 3 incorporate all factors that market participants
would consider in setting a price. They must be validated beforehand by an independent
control. Fair value measurement notably includes both liquidity risk and counterparty
risk.
♦ Netting of financial
assets and financial liabilities
In accordance with IAS 32, Crédit Agricole CIB pays an asset and a financial liability
and has a net balance if and when it has a legally enforceable right to offset the
amounts recognised and intends to settle the net amount or realise the asset and settle
the liability simultaneously.
The derivative instruments and repos handled with clearing houses that meet the
two
criteria required by IAS 32 have been offset on the balance sheet.
The effect of this netting is presented in the table in Note 6.12 on the amendment
to IFRS 7 on disclosures regarding the offsetting of financial assets and financial
liabilities.
♦ Net gains or
losses on financial instruments
NET GAINS (LOSSES)
ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
For financial instruments entered at fair value through profit or loss, this item
includes the following income elements:
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dividends and other revenues from equities and other variable
income securities which
are classified under financial assets at fair value through profit or loss;
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Changes in fair value of financial assets or liabilities at fair
value through profit
or loss;
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Gains and losses on disposal of financial assets at fair value
through profit or loss;
and
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changes in fair value and the results of disposals or termination
of derivative instruments
that do not enter into a fair value or cash flow hedging relationship.
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This heading also includes the inefficient portion of hedges.
NET GAINS (LOSSES)
ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH EQUITY CAPITAL
For financial assets entered at fair value in equity, this item includes the following
income elements:
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dividends from equity instruments classified as financial assets
measured at fair
value by non-recyclable equity;
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net gains (losses) on disposals and the profit or loss linked
to the termination of
the hedging relationship on debt instruments classified as financial assets at fair
value by recyclable equity;
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income on disposal or termination of instruments used for fair
value hedges of financial
assets at fair value by equity when the hedged element is disposed of.
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♦ Financing commitments
and financial guarantees given
Financing commitments that are not designated as fair value through profit or loss
or not treated as derivative instruments within the meaning of IFRS 9 are not recognised
on the balance sheet. They are, however, covered by provisions in accordance with
IFRS 9.
A financial guarantee contract is a contract which requires the issuer to make
specified
payments to reimburse the bearer for a loss suffered as a result of the default of
a specified debtor who does not make a payment at maturity according to the initial
conditions or those modified by a debt instrument.
Financial guarantee contracts are recognised at fair value initially then subsequently
at the higher of:
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the amount of the value correction for losses determined according
to the provisions
of the "Impairment" section of IFRS 9; or
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the amount initially recognised, less, where appropriate, the
aggregate income recognised
according to the principles of IFRS 15 "Revenue from contracts with customers".
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1.2.2 PROVISIONS
(IAS 37 AND 19)
Crédit Agricole CIB has identified all obligations (legal or constructive) resulting
from a past event for which it is probable that an outflow of resources will be required
to settle the obligation, and for which the due date or amount of the settlement is
uncertain but can be reliably estimated. These estimates are updated where applicable
whenever there is a material impact.
For obligations other than those related to credit risk, Crédit Agricole CIB has
set
aside general provisions to cover:
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operational risks;
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employee benefits;
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financing commitment execution risks;
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liability claims and guarantees; and
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tax risks.
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Certain estimates may be made to determine the amount of the following provisions:
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the reserve for operational risks, which although subject to
examination for identified
risks, requires Management to make assessments with regard to incident frequency and
the potential financial impact; and
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the reserve for legal risks, which is based on Management's best
estimate in light
of the information in its possession at the end of the reporting period.
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Detailed information is provided in Note 6.18 "Provisions".
1.2.3 EMPLOYEE
BENEFITS (IAS 19)
In accordance with IAS 19, employee benefits are recorded in four categories:
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short-term employee benefits, including salaries, social security
contributions, annual
leave, profit-sharing and incentive plans and premiums, are defined as those which
are expected to be settled within 12 months of the period in which the related services
have been rendered;
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long-term employee benefits (long-service awards, variable compensation
and compensation
payable 12 months or more after the end of the period);
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employment contract termination benefits; and
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post-employment benefits, subdivided into the following two subcategories:
defined-benefit
schemes and defined-contribution schemes.
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LONG-TERM EMPLOYEE
BENEFITS
Long-term employee benefits are employee benefits other than post-employment benefits
or termination benefits but not fully due to employees within 12 months after the
end of the period in which the related services have been rendered.
These include, in particular, bonuses and other deferred compensation payable 12
months
or more after the end of the period during which they have been granted, but which
are not share-based.
The measurement method is similar to the one used by the Group for post-employment
benefits with defined-benefit plans.
POST-EMPLOYMENT
BENEFITS
Defined-benefit
plans
At each reporting date, Crédit Agricole CIB Group sets aside reserves to cover
its
liabilities for retirement and similar benefits and all other employee benefits falling
in the category of defined benefit plans.
In accordance with IAS 19, these commitments are stated based on a set of actuarial,
financial and demographic assumptions, and in accordance with the projected unit credit
method. This method consists in booking a charge for each period of service, for an
amount corresponding to employee's vested benefits for the period. This charge is
calculated based on the discounted future benefit.
The calculations pertaining to the liabilities for retirement and other employee
benefits
are based on assumptions made by management with respect to the discount rate, staff
turnover rate and probable increases in salary and social security costs. If the actual
figures differ from the assumptions made, the retirement liability may increase or
decrease in future years (see Note 7.4 "Post-employment benefits, defined benefit
plans").
The discount rates are determined based on the average term of the commitment,
that
is, the arithmetical average of the terms calculated between the valuation date and
the payment date weighted by employee turnover assumptions.
The anticipated return on plan assets is also estimated by management. The returns
are estimated on the basis of expected returns on fixed income securities, and notably
bonds.
The expected return on plan assets is determined using discount rates applied to
measure
the defined benefit obligation.
In accordance with IAS 19 revised, Crédit Agricole CIB recognises all actuarial
differences
as gains or losses recognised directly in equity.
The amount of the provision is equal to:
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the present value of the obligation to provide the defined benefits
at the end of
the reporting period, calculated in accordance with the actuarial method recommended
by IAS 19;
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if necessary, reduced by the fair value of the assets allocated
to covering these
commitments. These may be represented by an eligible insurance policy. In the event
that 100% of the obligation is covered by a policy that exactly equals the expense
amount payable over the period for all or part of a defined benefit plan, the fair
value of the policy is deemed to be the value of the corresponding obligation, i.e.
the amount of the corresponding actuarial liability.
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Defined-contribution
plans
There are various mandatory pension plans to which "employers" contribute. The
funds
are managed by independent organisations and the contributing companies have no legal
or implied obligation to pay additional contributions if the funds do not have sufficient
assets to provide all the benefits corresponding to the services rendered by staff
during the current and previous years. As a consequence, Crédit Agricole CIB has no
liability in this respect other than the contributions to be paid for the year ended.
1.2.4 SHARE-BASED
PAYMENTS (IFRS 2)
IFRS 2 "Share-based payments" requires valuation of share-based payment transactions
in the company's income statement and balance sheet. The standard applies to transactions
carried out with employees, and more specifically:
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share-based payment transactions settled in equity instruments;
and
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share-based payment transactions settled in cash.
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The share-based payment plans initiated by Crédit Agricole CIB Group that are eligible
for IFRS 2 are of both kinds.
The expenses related to the share award plans of Crédit Agricole S.A., as well
as
those related to share subscriptions are accounted for as follows:
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for equity-settled plans, under employee expenses, with a corresponding
increase in
consolidated reserves Group share, spread on a straight-line basis over the period
of acquisition;
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for cash-settled plans, under employee expenses, with a corresponding
increase in
liabilities. These expenses are linearly spread over the vesting period (between three
and four years) taking into account service and/or performance conditions. The fair
value of the related liability is remeasured until its settlement to take into account
the possible non-realisation of those conditions and the change in value of Crédit
Agricole S.A. stock.
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Crédit Agricole S.A. share subscriptions proposed to employees as part of the group
Employee Share Ownership Plan is also governed by IFRS 2. Crédit Agricole CIB Group
applies the treatment set out in the release issued by CNC on 21 December 2004, supplemented
by the release issued by CNC on 7 February 2007. Shares may be offered to employees
with a discount of no more than 20%. These plans have no vesting period but the shares
are subject to a lock-up period of five years. The benefit granted to employees is
measured as the difference between the fair value of the acquired share taking into
account the lock-up period and the purchase price paid by the employee at the issue
date multiplied by the number of shares issued.
1.2.5 CURRENT
AND DEFERRED TAXES (IAS 12)
Crédit Agricole CIB is 99.9% owned by Crédit Agricole Group since 27 December 1996
and some of its subsidiaries are part of the tax consolidation Group of Crédit Agricole
S.A..
In accordance with IAS 12, the income tax charge includes all income taxes, whether
current or deferred.
The standard defines current tax liability as "the amount of income tax payable
(recoverable)
in respect of the taxable profit (tax loss) for a reporting period". Taxable income
is the profit (or loss) for a given accounting period measured in accordance with
the rules determined by the taxation authorities.
The applicable rates and rules used to measure the current tax liability are those
in effect in each country where the Group's companies are established.
The current tax liability relates to any income due or that will become due, for
which
payment is not subordinated to the completion of future transactions, even if payment
is spread over several years.
The current tax liability must be recognised as a liability until it is paid. If
the
amount that has already been paid for the current year and previous years exceeds
the amount due for these years, the surplus must be recognised under assets.
Moreover, certain transactions carried out by the entity may have tax consequences
that are not taken into account in measuring the current tax liability. IAS 12 defines
the difference between the carrying amount of an asset or liability and its tax basis
as a temporary difference.
This standard requires that deferred taxes be recognised in the following cases:
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a deferred tax liability should be recognised for any taxable
temporary differences
between the carrying amount of an asset or liability on the balance sheet and its
tax base, unless the deferred tax liability arises from:
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the initial recognition of goodwill,
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the initial recognition of an asset or a liability in a transaction
that is not a
business combination and that does not affect either the accounting or the taxable
profit (taxable loss) at the transaction date.
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a deferred tax asset should be recognised for any deductible
temporary differences
between the carrying amount of an asset or liability on the balance sheet and its
tax base, insofar as it is deemed probable that a future taxable profit will be available
against which such deductible temporary differences can be allocated.
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a deferred tax asset must also be recognised in order to carry
forward tax losses
and tax credits not allocated, to the extent that those sums can be offset against
future taxable income.
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The tax rates applicable in each country are used.
Deferred taxes are not discounted.
Taxable unrealised gains on securities do not generate any taxable temporary differences
between the carrying amount of the asset and the tax base. As a result, deferred tax
is not recognised on these gains. When the securities in question are categorised
as other financial instruments at fair value through equity, the latent capital gains
and losses are recognised against equity. The tax charge or saving effectively borne
by the entity arising from these unrealised gains or losses is also reclassified as
a deduction from these gains.
In France, all but 12% of long-term capital gains on the sale of equity investments,
as defined by the General Tax Code, are exempt from tax as from the tax year commencing
on 1 January 2007; the 12% of long term capital gains are taxed at the normally applicable
rate. Accordingly, unrealised gains recognised at the reporting date generate a temporary
difference requiring the recognition of deferred tax on this portion.
Current and deferred tax is recognised in net income for the year, unless the tax
arises from:
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either a transaction or event that is recognised directly through
other comprehensive
income, during the same year or during another year, in which case it is directly
debited or credited to other comprehensive income;
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or a business combination.
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Deferred tax assets and liabilities are offset against each other if, and only
if:
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the entity has a legally enforceable right to offset current
tax assets against current
tax liabilities; and
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the deferred tax assets and liabilities apply to income taxes
assessed by the same
tax authority:
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a) either on the same taxable entity,
b) or for different taxable entities that intend either to settle current tax assets
and liabilities on a net basis, or to settle their tax assets and liabilities at the
same time during each future financial year in which it is expected that substantial
deferred tax assets or liabilities will be paid or recovered.
When tax credits on income from securities portfolios and amounts receivable are
effectively
used to pay income tax due for the year, they are recognised under the same heading
as the income with which they are associated. The corresponding tax charge is kept
under the heading "Income tax charge" in the income statement.
However, given that the legislative intent when introducing the tax credit for
competitiveness
and employment (CICE) was to reduce employee expenses, Crédit Agricole CIB chose to
recognise the CICE (Article 244 quater C of the French General Tax Code - CGI) as
a reduction in employee expenses.
1.2.6 TREATMENT
OF FIXED ASSETS (IAS 16, 36, 38 AND 40)
Crédit Agricole CIB Group applies component accounting for all of its property,
plant
and equipment. In accordance with the provisions of IAS 16, the depreciable amount
takes account of the potential residual value of property, plant and equipment.
Land is measured at cost less any impairment losses.
Operating and investment properties and equipment are recorded at acquisition cost
minus the depreciation and impairment accumulated over the period of use.
Purchased software is measured at purchase price minus accumulated depreciation
and
impairment losses since acquisition. Proprietary software is measured at cost less
accumulated depreciation and impairment losses since completion.
Apart from software, intangible assets are mainly assets acquired during a business
combination resulting from contract law (e.g. distribution agreement). These were
valued on the basis of corresponding future economic benefits or expected service
potential.
Fixed assets are depreciated over their estimated useful lives.
The following components and depreciation periods have been adopted by the Crédit
Agricole CIB Group following the application of component accounting for fixed assets.
These depreciation periods are adjusted according to the type of asset and its location:
| Component |
Depreciation period |
| Land |
Not depreciable |
| Structural works |
30 to 80 years |
| Non-structural works |
8 to 40 years |
| Plant and equipment |
5 to 25 years |
| Fixtures and fittings |
5 to 15 years |
| Computer equipment |
4 to 7 years |
| Special equipment |
4 to 5 years |
Exceptional depreciation charges corresponding to tax-related depreciation and
not
to any real impairment in the value of the asset are eliminated in the consolidated
financial statements.
1.2.7 FOREIGN
CURRENCY TRANSACTIONS (IAS 21)
In accordance with IAS 21, a distinction is made between monetary items (e.g. debt
instruments) and non-monetary items (e.g. equity instruments).
On the reporting date, foreign-currency denominated monetary assets and liabilities
are translated into Crédit Agricole CIB Group's functional currency on the closing
date. The resulting translation adjustments are recorded in the income statement.
There are three exceptions to this rule:
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on debt instruments at fair value by recyclable equity, the translation
adjustment
component calculated on the amortised cost is recognised in profit or loss; the additional
amount is recorded under recyclable equity;
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translation adjustments on elements designated as cash flow hedges
or forming part
of a net investment in a foreign operation are recognised in recyclable equity.
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for financial liabilities at fair value through profit or loss,
translation adjustments
linked to variations in fair value of own credit risk are registered under non-recyclable
equity
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Non-monetary items are treated differently depending on the type of items:
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items at historical cost are measured at the exchange rate on
the transaction date;
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items at fair value are measured at the exchange rate at the
end of the reporting
period.
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The translation adjustments on non-monetary items are recognised:
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in the income statement if the gain or loss on the non-monetary
item is recorded in
the income statement;
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| ― |
in non-recyclable equity if the gain or loss on the non-monetary
item is recorded
in non-recyclable equity.
|
1.2.8 REVENUE
FROM CONTRACTS WITH CUSTOMERS (IFRS 15)
Fee and commission income and expenses are recognised in income based on the nature
of the services with which they are associated:
Fees and commissions that are an integral part of the effective yield on a financial
instrument are recognised as an adjustment to the yield on the instrument and included
in its effective interest rate. With regard to other kinds of commissions, the entry
in the income statement must reflect the rate of transfer to the client of the control
of the good or service sold:
| ― |
the profit or loss of a transaction associated with a provision
of services is entered
under Commissions, during the transfer of control of the provision of the service
to the client if it can be reliably estimated. This transfer may occur at the same
rate as that at which the service is provided (ongoing service) or on a given date
(one-off service).
|
a. Commissions remunerating ongoing services (commissions on payment methods, for
example) are entered under profit or loss depending on the degree of completion of
the service provided.
b. Commissions received or paid for the remuneration of one-off services are, for
their part, entirely entered under profit or loss when the service is provided.
Commission to be paid or received pending the attainment of a performance target
are
entered for the amount for which it is highly likely that the revenue thus entered
will not be subsequently subject to a significant downward adjustment once the uncertainty
has been resolved. This estimate is updated at each closing. In practice, this condition
has the effect of deferring the recording of certain performance commissions until
the performance assessment period has passed, and until commissions are certain.
1.2.9 LEASES (IAS
17)
As required by IAS 17, leases are analysed in accordance with their substance and
financial reality. They are classified as operating leases or finance leases.
Finance lease transactions are treated as an acquisition of a fixed asset by the
lessee
financed by a loan from the lessor.
In the lessor's financial statements, the analysis of the economic substance of
the
transactions results in the following:
| ― |
recognition of a financial receivable from the customer, which
is amortised by the
lease payments received;
|
| ― |
lease payments are broken down into interest and principal, known
as financial amortisation;
|
In the lessee's financial statements, finance leases are restated such that they
are
recognised in the same way as if the asset had been purchased on credit, by recognising
a financial liability, recording the purchased asset under assets and depreciating
the asset.
In the income statement, the theoretical depreciation charge (the charge that would
have been recognised if the asset had been purchased) and the finance expenses (incurred
in connection with the financing) are recorded in the place of the lease payments.
For operating leases, the lessee recognises payments as expenses and the lessor records
the corresponding income under rents, and the leased assets on its balance sheet.
1.2.10 NON-CURRENT
ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (IFRS 5)
A non-current asset (or a disposal group) is classified as held for sale if its
carrying
amount will be recovered principally through a sale transaction rather than through
continuing use.
For this to be the case, the asset (or disposal group) must be available for immediate
sale in its present condition and its sale must be highly probable.
The relevant assets and liabilities are shown separately on the balance sheet under
Non-current assets held-for-sale and discontinued operations and Liabilities associated
with non-current assets held-for-sale and discontinued operations.
A non-current asset (or disposal group) classified as held for sale is measured
at
the lower of its carrying amount and fair value less costs of sale. A charge for impairment
of unrealised gains is recognised in the income statement. Unrealised gains are no
longer amortised when they are reclassified.
If the fair value of a disposal group less selling costs is under its carrying
amount
after impairment of non-current assets, the difference is allocated to other disposal
group assets including the financial assets and is recognised under net income of
held-for-sale operations.
A discontinued operation is a component that the Group has either disposed of,
or
is classified as held-for-sale, according to the following situations:
| ― |
it represents a main and different line of business or a geographical
area;
|
| ― |
it is part of a single coordinated plan to dispose of a separate
major line of business
or geographical area of operations; or,
|
| ― |
it is a subsidiary acquired exclusively with a view to resale.
|
The following are disclosed on a separate line of the income statement:
| ― |
the profit or loss from discontinued operations until the date
of disposal, net of
tax;
|
| ― |
the gain or loss recognised on the disposal or on measurement
to fair value less costs
of sale of the assets and liabilities constituting the discontinued operations, net
of tax.
|
1.3 Consolidation
principles and methods (IFRS 10, IFRS 11 and IAS 28)
1.3.1 SCOPE OF
APPLICATION
The consolidated financial statements include the financial statements of Crédit
Agricole
CIB and those of all companies over which, in compliance with IFRS 10, IFRS 11 and
IAS 28, Crédit Agricole CIB exercises control, joint control or significant influence.
DEFINITIONS OF
CONTROL
In compliance with international accounting standards, all entities under control,
under joint control or under significant influence are consolidated, provided that
they are not covered by the exclusions below.
Exclusive control over an entity is deemed to exist if Crédit Agricole CIB is exposed
to or entitled to receive variable returns as a result of its involvement with the
entity and if the power it holds over this entity allows it to influence these returns.
Power in this context means substantive (voting or contractual) rights. Rights are
considered substantive if the holder of the rights can in practice exercise them when
decisions about the company's relevant activities are made.
Crédit Agricole CIB is deemed to control a subsidiary through voting rights when
its
rights give it the practical ability to direct the subsidiary's relevant activities.
Crédit Agricole CIB generally controls the subsidiary when it holds, directly or indirectly
through subsidiaries, more than half of the existing or potential voting rights of
an entity, unless it can be clearly demonstrated that such holding does not allow
directing relevant activities. Control is also deemed to exist where Crédit Agricole
CIB holds half or less than half of the voting rights, including potential rights,
in an entity but is able in practice to direct its relevant activities at its sole
discretion, notably because of the existence of contractual arrangements, the size
of its stake in the voting rights compared to those of other investors, or other reasons.
Control of a structured entity is not assessed on the basis of voting rights as
these
have no effect on the entity's returns. When assessing control, consideration is given
not only to contractual arrangements in force but also to whether Crédit Agricole
CIB was involved in creating the entity and what decisions it made at the time, what
agreements were made at its inception and what risks are borne by Crédit Agricole
CIB, any rights under agreements that give the investor the power to direct relevant
activities in specific circumstances only and any other facts or circumstances that
indicate the investor can direct the entity's relevant activities. Where a management
mandate exists, the scope of the decision-making authority relating to the delegation
of power to the manager and the remuneration to which the contractual arrangements
entitles are analysed in order to determine whether the manager acts as an agent (delegated
power) or principal (for his own account). Thus, when decisions about the relevant
activities of the entity need to be taken, the indicators to be analysed in order
to define whether an entity acts as an agent or as the principal are the scope of
the decision-making power delegated to the manager over the entity, the remunerations
to which the contractual arrangements give entitlement, but also the substantive rights
that may affect the decision-maker's capacity held by the other parties involved in
the entity, and the exposure to the entity and the variability in returns from other
interests held in the entity.
Joint control is deemed to exist when there is a contractual division of control
over
an economic activity. Decisions affecting the entity's relevant activities require
unanimous agreement of the joint controllers. In traditional entities, significant
influence is defined as the power to influence but not control a company's financial
and operational policies. Crédit Agricole CIB is presumed to have significant influence
if it owns 20% or more of the voting rights in an entity, whether directly or indirectly
through subsidiaries.
EXCLUSIONS FROM
THE SCOPE OF CONSOLIDATION
In accordance with IAS 28, minority holdings held by entities for which the option
provided in article 18 of this standard has been exercised are excluded from the scope
of consolidation insofar as they are categorised as financial assets at fair value
through profit or loss.
1.3.2 CONSOLIDATION
METHODS
The methods of consolidation are respectively defined by IFRS 10 and IAS 28 revised.
They depend on the type of control exercised by Crédit Agricole CIB over the entities
that can be consolidated, regardless of activity or if they have legal entity status:
| ― |
full consolidation, for controlled entities, including entities
with different financial
statement structures, even if their business is not an extension of that of Crédit
Agricole CIB;
|
| ― |
the equity method, for the entities over which Crédit Agricole
S.A. exercises significant
influence or joint control.
|
Full consolidation consists in substituting for the value of the shares each of
the
assets and liabilities carried by each subsidiary. The share of the minority interests
in equity and income is separately identified in the consolidated balance sheet and
income statement.
Minority interests correspond to the holdings that do not allow control as defined
by IFRS 10 and incorporate the instruments that are shares of current interests and
that give right to a proportional share of net assets in the event of liquidation
and the other equity instruments issued by the subsidiary and not held by the Group.
The equity method consists of substituting for the value of shares, the Group's proportional
share of the equity and income of the companies concerned.
The change in the carrying amount of these shares includes changes in goodwill.
In the event of incremental share purchases or partial disposals with continued
joint
control or significant influence, Crédit Agricole CIB recognises:
| ― |
in the case of an increase in the percentage of interest, additional
goodwill;
|
| ― |
in the case of a reduction in the percentage of interest, a gain
or loss on disposal/dilution
in profit or loss.
|
1.3.3 ADJUSTMENTS
AND ELIMINATIONS
Adjustments are made to harmonise the methods of valuing the consolidated companies.
The impact of Group internal transactions on the consolidated balance sheet and
income
statement is eliminated for fully consolidated entities.
Capital gains or losses arising from intra-Group asset transfers are eliminated;
any
potential lasting impairment resulting from an internal disposal is recognised.
1.3.4 TRANSLATION
OF FOREIGN SUBSIDIARIES' FINANCIAL STATEMENTS (IAS 21)
The financial statements of subsidiaries denominated in foreign currencies are
translated
into euros in two stages:
| ― |
conversion, where applicable, of the local currency in the functional
currency (the
currency of the main economic environment in which the entity operates). The conversion
is done as if the items were initially recognised in the functional currency (same
conversion principles as for transactions in foreign currency);
|
| ― |
the functional currency is translated into euros, the currency
in which the Group's
consolidated financial statements are presented. Assets and liabilities are translated
at the closing rate. Income and expenses included in the income statement are translated
at the average exchange rate for the period. Translation adjustments for assets, liabilities
and income statement items are recognised under a specific item in equity. These translation
differences are recognised as income during the total or partial transfer of the entity.
In the event of the sale of a subsidiary (exclusive control), the reclassification
of equity as income takes place only in the event of a loss of control.
|
1.3.5 BUSINESS
COMBINATIONS - GOODWILL (IFRS 3)
Business combinations are accounted for using the acquisition method in accordance
with IFRS 3, except for business combinations under common control which are excluded
from the field of application of IFRS 3. Pursuant to IAS 8, these transactions are
entered at carrying amount using the pooling of interests method, with reference to
US standard ASU805-50 which seems to comply with the IFRS general principles.
On the date of acquisition, the identifiable assets, liabilities and contingent
liabilities
of the acquired entity which satisfy the conditions for recognition set out in IFRS
3 are recognised at their fair value.
Notably, restructuring liabilities are only recognised as a liability of the acquired
entity if, at the date of acquisition, the acquire is under an obligation to complete
the restructuring.
Price adjustment clauses are recognised at fair value even if their application
is
not probable. Subsequent changes in the fair value of clauses if they are financial
liabilities are recognised in the income statement. Only price adjustment clauses
relating to transactions where control was obtained at the latest by 31 December 2009
may still be recorded against goodwill, because these transactions were accounted
for under IFRS 3 pre-revision (2004).
The portion of holdings not allowing control that are shares of current interests
giving rights to a share of the net assets in the event of liquidation may be measured,
at the acquirer's choice, in two ways:
| ― |
at fair value on the date of acquisition;
|
| ― |
the share of the identifiable assets and liabilities of the acquired
company revalued
at fair value.
|
The option may be exercised at each acquisition.
The balance of interests not allowing control (equity instruments issued by the
subsidiary
and not held by the Group) should be recognised for its fair value on the date of
acquisition.
The initial assessment of assets, liabilities and contingent liabilities may be
revised
within a maximum period of twelve months after the date of acquisition.
Some transactions relating to the acquired entity are recognised separately from
the
business combination. This applies primarily to:
| ― |
transactions that end an existing relationship between the acquired
company and the
acquiring company;
|
| ― |
transactions that compensate employees or shareholders of the
acquired company for
future services;
|
| ― |
transactions whose aim is to have the acquired company or its
former shareholders
repay expenses borne by the acquirer.
|
These separate transactions are generally recognised in the income statement at
the
acquisition date.
The consideration transferred on the occasion of a business combination (the acquisition
costs) is valued as the total of the fair values transferred by the acquirer at the
date of acquisition in exchange for control of the acquired entity (e.g. cash flow,
equity instruments...). The costs directly attributable to the business combination
are recognised as expenses, separately from the business combination. If the transaction
has a very strong probability of occurrence, they are recognised under the heading
"Net gains (losses) on disposal of other assets", otherwise they are recognised under
the heading "Operating expenses".
The difference between the cost of acquisition and interests that do not allow
control
and the net balance on the date of acquisition of acquired identifiable assets and
liabilities taken over, valued at their fair value is recognised, when it is positive,
in the assets side of the consolidated balance sheet, under the heading "Goodwill"
when the acquired entity is fully consolidated and in the heading "Investments in
equity-accounted entities" when the acquired company is consolidated using the equity
method of accounting. Any negative goodwill is recognised immediately through profit
or loss. Goodwill is carried in the balance sheet at its initial amount in the currency
of the acquired entity and translated at the closing rate at the end of the reporting
period.
When control is taken by stages, the interest held before taking control is revalued
at fair value through profit or loss at the date of acquisition and the goodwill is
calculated once, using the fair value at the date of acquisition of acquired assets
and liabilities taken over. Goodwill is tested for impairment whenever there is objective
evidence of a loss of value and at least once a year.
The choices and assumptions used in assessing the holdings that do not allow control
at the date of acquisition may influence the amount of initial goodwill and any impairment
resulting from a loss of value.
For the purpose of impairment testing, goodwill is allocated to the Group Cash
Generating
Units (CGUs) that are expected to benefit from the business combination. The CGUs
have been defined within the Group's business lines as the smallest identifiable group
of assets and liabilities functioning in a single business model. Impairment testing
consists of comparing the carrying amount of each CGU, including any goodwill allocated
to it, with its recoverable amount.
The recoverable amount of the CGU is defined as the higher of fair value diminished
of selling costs and value in use. The value in use is the present value of the future
cash flows of the CGU, as set out in medium-term business plans prepared by the Group
for management purposes.
When the recoverable amount is lower than the carrying amount, a corresponding
impairment
loss is recognised for the goodwill allocated to the CGU. This impairment is irreversible.
In the case of an increase in the interest percentage of Crédit Agricole CIB in
an
entity already controlled exclusively, the difference between the cost of acquisition
and the share of net assets acquired is recorded in the heading "Consolidated reserves
- Group share". In the event of a decrease in the interest percentage of Crédit Agricole
CIB in an entity that remains exclusively controlled, the difference between the sale
price and the book value of the share of the divested position is also recognised
directly in "Consolidated reserves - Group share". The expenses arising from these
transactions are recognised in equity.
Crédit Agricole CIB Group has granted shareholders of certain fully consolidated
subsidiaries
an undertaking to acquire their holdings in these subsidiaries, at a price to be determined
according to a predefined formula which takes account of future developments in their
business. These undertakings are in substance put options granted to the minority
shareholders, which in accordance with the provisions of IAS 32, means that the minority
interests are treated as a liability rather than as shareholders' equity.
The accounting treatment of sale options granted to minority shareholders is as
follows:
| ― |
when a sale option is granted to the minority shareholders of
a fully consolidated
subsidiary, a liability is recognised in the balance sheet; on initial recognition,
the liability is measured at the estimated present value of the exercise price of
the options granted. Against this liability, the share of net assets belonging to
the minority shareholders concerned is reduced to zero and the remainder is deducted
from equity;
|
| ― |
subsequent changes in the estimated value of the exercise price
will affect the amount
of the liability, offset by an adjustment to equity. Symmetrically, subsequent changes
in the share of net assets due to minority shareholders are cancelled, offset in equity.
|
When there is a loss of control, the proceeds from the disposal are calculated
on
the entirety of the entity sold and any investment share kept is recognised in the
balance sheet at its fair value on the date control was lost.
NOTE 2: MAJOR
STRUCTURAL TRANSACTIONS AND MATERIAL EVENTS DURING THE PERIOD
The scope of consolidation and changes at 31 December 2018 are shown in detail
at
the end of the notes in Note 10 "Scope of consolidation at 31 December 2018".
2.1 Application
of the new IFRS 9
In accordance with the IFRS standards and amendments adopted by the European Union
on 22 November 2016, 3 November 2017 and 22 March 2018, Crédit Agricole S.A. Group
implemented the following provisions at 1 January 2018:
| ― |
application of IFRS 9 Financial instruments;
|
| ― |
early application of the amendment to Prepayment Features with
Negative Compensation.
|
The regulatory provisions for the application of these texts to the Group's consolidated
financial statements are presented in Note 1 "Group accounting policies and principles,
assessments and estimates applied".
The impact of the first application of the new IFRS 9 standard, adopted with effect
from 1 January 2018, is -€119 million on equity exclusively Group share.
The detailed impacts of the application of IFRS 9 as at 1 January 2018 are presented
in the notes to the consolidated financial statements.
2.2 Application
of the new IFRS 15
IFRS 15, applicable from 1 January 2018, replacing IAS 18, aims to homogenise accounting
principles relating to long-term manufacturing and construction contracts, IT services
contracts and licenses and packaged sales of goods and services. It does not apply
to revenue from financial instruments (IFRS 9), leases (see new standard IFRS 16 applicable
from 1 January 2019) and revenue from insurance contracts (IFRS 17 applicable from
1 January 2022). The accounting consequences of this new standard are limited for
the Crédit Agricole group insofar as group practices in the area of accounting for
commissions already respect this text.
The current rate of income recognition is in line with the requirements of IFRS
15,
whether the service is provided at a point in time or over time. The variable components
of commissions (such as asset management) are only entered when they are certain,
as required by IFRS 15.
With regard to real estate development, there was a change in the recognition of
the
margin for "Off-Plan Sales" in 2017. In accordance with a provision of IAS 18 and
best practice, a share of the margin is recognised before the start of works on the
basis of the value of the land sold.
2.3 ACQUISITION
OF BANCA LEONARDO
ACQUISITION OF
BANCA LEONARDO
On 3 May 2018, Indosuez Wealth Management finalised the acquisition of 94.06% of
the
share capital of Banca Leonardo, a leading independent wealth management company in
Italy, confirming the agreement concluded in November 2017.
This purchase is part of Crédit Agricole's Medium-Term Plan "Strategic Ambition
2020",
which provides for targeted acquisitions for the Group's wealth management business.
This is a milestone for Indosuez Wealth Management, enabling it to strengthen its
presence in Europe by integrating an entity that operates in Crédit Agricole Group
S.A.'s second domestic market.
In accordance with IFRS 3 (Revised), the balance sheet of Banca Leonardo, as at
3
May 2018, reflects the fair value of the assets acquired and the liabilities assumed
by the Group, which totalled €1.14 billion. On this basis, goodwill in the amount
of €22 million was recorded on the assets side of the balance sheet.
2.4 Banque Saudi
Fransi dispute
Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB) has received
a
Request for Arbitration submitted by Banque Saudi Fransi (BSF) before the International
Chamber of Commerce (ICC Geneva). The dispute relates to the performance of a Technical
Services Agreement between BSF and Crédit Agricole CIB that is no longer in force.
On 7 August 2018, BSF quantified its claim at SAR 1.012 billion, the equivalent
of
about €232 million, and reserved the right to submit additional claims. The arbiters
have been chosen and Crédit Agricole CIB, which completely refutes BSF's allegations
and claim, filed its first response on 1 October. The tribunal convened a procedural
hearing for the end of 2018 during which the rules governing the arbitration were
discussed in detail. The procedural timetable is in the process of being set.
2.5 Deposit Guarantee
and resolution Fund and Single Resolution Fund
The Deposit Guarantee and Resolution Fund (FGDR) was created in 2013 by the Law
on
the Separation and Regulation of Banking Activities of 26 July 2013, and essentially
takes over the tasks of the Deposit Guarantee Fund (FGD):
| ― |
management and implementation of deposit and security guarantee
schemes in France.
To this end, it has raised ex-ante contributions from French institutions;
|
| ― |
with regard to resolution: it acts as an intermediary between
the French institutions
and the Single Resolution Fund.
|
The Single Resolution Fund (SRF) was created in 2014. It is a supranational fund
financed
by eurozone member states, notably enabling the pooling of financial resources to
be used for banking resolution. The SRF will be gradually built up by contributions
from national resolution funds for a period of eight years from 2016, to reach a target
of at least 1% of the covered deposits of all approved credit institutions of the
participating member states combined by 2023. Having observed a strong increase in
deposits in the participating member states, the SRF realised that it needed to review
the contribution calculation, taking into account projection to 2023 of said deposits:
this new methodology resulted in an increase in contributions in 2018. Charges entered
at 31 December 2018 amount to -€157 million for the Crédit Agricole CIB group.
NOTE 3: FINANCIAL
MANAGEMENT, RISK EXPOSURE AND HEDGING POLICY
The Department of Group Permanent Control and Risks (DRG) is responsible for the
management
of banking risks in Crédit Agricole CIB. This department reports to the Chief Executive
Officer and its brief is to ensure the management and permanent control of credit,
financial and operational risks.
A description of these processes and commentary now appear in the "Risk factors"
chapter
of the management report, as allowed under IFRS 7. Nonetheless, the accounting breakdowns
are still presented in the financial statements.
3.1 Credit risk
(see chapter on "Risk Factors - Credit Risk")
VALUE ADJUSTMENTS
FOR LOSSES DURING THE PERIOD
Value adjustments for losses correspond to the impairment of assets and to provisions
for off-balance sheet commitments recognised in net income ("Cost of risk") relating
to credit risk.
The different stages of impairment ('Performing assets' - Bucket 1 & Bucket
2 and
'Impaired assets' - Bucket 3) are presented in Note 1.2 "Accounting policies and principles"
in the chapter on "Financial Instruments - Provision for Credit Risk".
The following tables present the closing balances of value adjustments for losses
recognised under "Cost of risk", by accounting category and type of instrument.
► Financial assets
at amortised cost: Debt securities
|
|
Performing assets |
Credit-impaired assets
(Bucket 3) |
|
|
Assets subject to
12-month ECL (Bucket 1) |
Assets subject to
lifetime ECL (Bucket 2) |
|
|
| € million |
Gross carrying amount |
Loss allowance |
Gross carrying amount |
Loss allowance |
Gross carrying amount |
Loss allowance |
| Balance at 1 January 2018 |
23,206 |
(2) |
|
|
|
|
| Transfer between buckets during the period |
|
|
|
|
|
|
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
|
|
|
|
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
|
|
|
|
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
|
|
|
|
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
|
|
|
|
| Total after transfer |
23,206 |
(2) |
|
|
|
|
| Changes in gross carrying amounts and loss allowances |
4,667 |
(2) |
|
|
26 |
(14) |
| New financial assets: acquisition, granting, origination...
(1) |
10,197 |
(3) |
|
|
|
|
| Derecognition: disposal, repayment, maturity... |
(6,312) |
1 |
|
|
|
|
| Write-off |
|
|
|
|
|
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
|
|
|
| Changes in models' credit risk parameters during the
period |
|
|
|
|
|
|
| Changes in model / methodology |
|
|
|
|
|
|
| Changes in scope |
|
|
|
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
|
|
|
| Other |
782 |
|
|
|
26 |
(14) |
| Total |
27,873 |
(4) |
|
|
26 |
(14) |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (2) |
16 |
|
|
|
|
|
| Balance at 31 December 2018 |
27,889 |
(4) |
|
|
26 |
(14) |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
|
|
|
|
|
|
Total |
| € million |
Gross carrying amount (a) |
Loss allowance (b) |
Net carrying amount (a) + (b) |
| Balance at 1 January 2018 |
23,206 |
(2) |
23,204 |
| Transfer between buckets during the period |
|
|
|
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
|
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
|
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
|
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
|
| Total after transfer |
23,206 |
(2) |
23,204 |
| Changes in gross carrying amounts and loss allowances |
4,693 |
(16) |
|
| New financial assets: acquisition, granting, origination...
(1) |
10,197 |
(3) |
|
| Derecognition: disposal, repayment, maturity... |
(6,312) |
1 |
|
| Write-off |
|
|
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
| Changes in models' credit risk parameters during the
period |
|
|
|
| Changes in model / methodology |
|
|
|
| Changes in scope |
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
| Other |
808 |
(14) |
|
| Total |
27,899 |
(18) |
27,881 |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (2) |
16 |
|
|
| Balance at 31 December 2018 |
27,915 |
(18) |
27,897 |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
|
(1)
Originations in Bucket 2 could include some originated loans in Bucket 1 reclassified
in Bucket 2 during the period
(2)
Includes the variations of fair value adjustments of micro-hedged instruments, the
variations relating to the use of the EIR method (notably the amortisation of premiums/discounts),
the variations of the accretion of discounts on restructured loans (recovered as revenue
over the remaining term of the asset), and the variations of changes in related receivables.
► Financial assets
at amortised cost: loans and receivables due from credit institutions
|
|
Performing assets |
Credit-impaired assets
(Bucket 3) |
|
|
Assets subject to
12-month ECL (Bucket 1) |
Assets subject to
lifetime ECL (Bucket 2) |
|
|
| € million |
Gross carrying amount |
Loss allowance |
Gross carrying amount |
Loss allowance |
Gross carrying amount |
Loss allowance |
| Balance at 1 January 2018 |
26,203 |
(24) |
41 |
|
407 |
(383) |
| Transfer between buckets during the period |
33 |
|
(29) |
|
(4) |
|
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
|
|
|
|
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
29 |
|
(29) |
|
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
|
|
|
|
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
4 |
|
|
|
(4) |
|
| Total after transfer |
26,236 |
(24) |
12 |
|
403 |
(383) |
| Changes in gross carrying amounts and loss allowances |
(7,129) |
20 |
43 |
|
9 |
(8) |
| New financial assets: acquisition, granting, origination
(1) |
5,292 |
(31) |
43 |
|
|
|
| Derecognition: disposal, repayment, maturity... |
(12,734) |
9 |
|
|
(3) |
|
| Write-off |
|
|
|
|
(1) |
1 |
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
|
|
|
| Changes in models' credit risk parameters during the
period |
|
|
|
|
|
5 |
| Changes in model / methodology |
|
|
|
|
|
|
| Changes in scope |
210 |
|
|
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
|
|
|
| Other |
103 |
42 |
|
|
13 |
(14) |
| Total |
19,107 |
(4) |
55 |
|
412 |
(391) |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (2) |
(6) |
|
|
|
(1) |
|
| Balance at 31 December 2018 |
19,101 |
(4) |
55 |
|
411 |
(391) |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
|
|
|
|
|
|
Total |
| € million |
Gross carrying amount (a) |
Loss allowance (b) |
Net carrying amount (a) + (b) |
| Balance at 1 January 2018 |
26,651 |
(407) |
26,244 |
| Transfer between buckets during the period |
|
|
|
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
|
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
|
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
|
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
|
| Total after transfer |
26,651 |
(407) |
26,244 |
| Changes in gross carrying amounts and loss allowances |
(7,077) |
12 |
|
| New financial assets: acquisition, granting, origination
(1) |
5,335 |
(31) |
|
| Derecognition: disposal, repayment, maturity... |
(12,737) |
9 |
|
| Write-off |
(1) |
1 |
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
| Changes in models' credit risk parameters during the
period |
|
5 |
|
| Changes in model / methodology |
|
|
|
| Changes in scope |
210 |
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
| Other |
116 |
28 |
|
| Total |
19,574 |
(395) |
19,179 |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (2) |
(7) |
|
|
| Balance at 31 December 2018 |
19,567 |
(395) |
19,172 |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
|
(1)
Originations in Bucket 2 could include some originated loans in Bucket 1 reclassified
in Bucket 2 during the period
(2)
Includes the variations of fair value adjustments of micro-hedged instruments, the
variations relating to the use of the EIR method (notably the amortisation of premiums/
discounts), the variations of the accretion of discounts on restructured loans (recovered
as revenue over the remaining term of the asset), and the variations of changes in
related receivables.
► Financial assets
at amortised cost: loans and receivables due from customers
|
|
Performing assets |
Credit-impaired assets
(Bucket 3) |
|
|
Assets subject to
12-month ECL (Bucket 1) |
Assets subject to
lifetime ECL (Bucket 2) |
|
|
| € million |
Gross carrying amount |
Loss allowance |
Gross carrying amount |
Loss allowance |
Gross carrying amount |
Loss allowance |
| Balance at 1 January 2018 |
106,591 |
(108) |
11,996 |
(493) |
3,558 |
(1,940) |
| Transfer between buckets during the period |
(864) |
|
634 |
(12) |
230 |
(50) |
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
(1,259) |
6 |
1,259 |
(23) |
|
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
439 |
(8) |
(439) |
10 |
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
(44) |
2 |
(204) |
1 |
248 |
(50) |
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
18 |
|
(18) |
|
| Total after transfer |
105,727 |
(108) |
12,630 |
(505) |
3,788 |
(1,990) |
| Changes in gross carrying amounts and loss allowances |
15,496 |
(36) |
(535) |
71 |
(572) |
234 |
| New financial assets: acquisition, granting, origination...
(1) |
54,911 |
(90) |
2,215 |
(188) |
|
|
| Derecognition: disposal, repayment, maturity... |
(40,879) |
84 |
(2,880) |
356 |
(210) |
88 |
| Write-off |
|
|
|
|
(418) |
416 |
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
|
|
|
| Changes in models' credit risk parameters during the
period |
|
2 |
|
(16) |
|
(233) |
| Changes in model / methodology |
|
|
|
|
|
|
| Changes in scope |
271 |
|
|
|
38 |
(17) |
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
|
|
|
| Other |
1,193 |
(32) |
130 |
(81) |
18 |
(20) |
| Total |
121,223 |
(144) |
12,095 |
(434) |
3,216 |
(1,756) |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (2) |
77 |
|
15 |
|
10 |
|
| Balance at 31 December 2018 |
121,300 |
(144) |
12,110 |
(434) |
3,226 |
(1,756) |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
|
|
|
|
|
|
Total |
| € million |
Gross carrying amount (a) |
Loss allowance (b) |
Net carrying amount (a) + (b) |
| Balance at 1 January 2018 |
122,145 |
(2,541) |
119,604 |
| Transfer between buckets during the period |
|
(62) |
|
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
(17) |
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
|
2 |
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
(47) |
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
|
| Total after transfer |
122,145 |
(2,603) |
119,542 |
| Changes in gross carrying amounts and loss allowances |
14,389 |
269 |
|
| New financial assets: acquisition, granting, origination...
(1) |
57,126 |
(278) |
|
| Derecognition: disposal, repayment, maturity... |
(43,969) |
528 |
|
| Write-off |
(418) |
416 |
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
| Changes in models' credit risk parameters during the
period |
|
(247) |
|
| Changes in model / methodology |
|
|
|
| Changes in scope |
309 |
(17) |
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
| Other |
1,341 |
(133) |
|
| Total |
136,534 |
(2,334) |
134,200 |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (2) |
102 |
|
|
| Balance at 31 December 2018 |
136,636 |
(2,334) |
134,302 |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
|
(1)
Originations in Bucket 2 could include some originated loans in Bucket 1 reclassified
in Bucket 2 during the period.
(2)
Includes the variations of fair value adjustments of micro-hedged instruments, the
variations relating to the use of the EIR method (notably the amortisation of premiums/
discounts), the variations of the accretion of discounts on restructured loans (recovered
as revenue over the remaining term of the asset), and the variations of changes in
related receivables.
► Financial assets
at fair value through equity: Debt securities
|
|
Performing assets |
Credit-impaired assets
(Bucket 3) |
|
|
Assets subject to
12 month ECL (Bucket 1) |
Assets subject to
lifetime ECL (Bucket 2) |
|
|
| € million |
Carrying amount |
Loss allowance |
Carrying amount |
Loss allowance |
Carrying amount |
Loss allowance |
| Balance at 1 January 2018 |
16,992 |
(5) |
|
|
|
(3) |
| Transfer between buckets during the period |
|
|
|
|
|
|
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
|
|
|
|
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
|
|
|
|
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
|
|
|
|
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
|
|
|
|
| Total after transfer |
16,992 |
(5) |
|
|
|
(3) |
| Changes in gross carrying amounts and loss allowances |
(7,291) |
2 |
|
|
|
|
| Fair value revaluation during the period |
(85) |
|
|
|
|
|
| New financial assets: acquisition, granting, origination,... |
649 |
(1) |
|
|
|
|
| Derecognition: disposal, repayment, maturity... |
(8,194) |
3 |
|
|
|
|
| Write-off |
|
|
|
|
|
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
|
|
|
| Changes in models' credit risk parameters during the
period |
|
|
|
|
|
|
| Changes in model / methodology |
|
|
|
|
|
|
| Changes in scope |
124 |
|
|
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
|
|
|
| Other |
215 |
|
|
|
|
|
| Total |
9,701 |
(3) |
|
|
|
(3) |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (1) |
(1) |
|
|
|
|
|
| Balance at 31 December 2018 |
9,700 |
(3) |
|
|
|
(3) |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
|
|
|
|
|
|
Total |
| € million |
Carrying amount |
Loss allowance |
| Balance at 1 January 2018 |
16,992 |
(8) |
| Transfer between buckets during the period |
|
|
| Transfer from 12-month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
|
| Return to lifetime ECL (Bucket 2) from 12-month ECL (Bucket
1) |
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
| Total after transfer |
16,992 |
(8) |
| Changes in gross carrying amounts and loss allowances |
(7,291) |
2 |
| Fair value revaluation during the period |
(85) |
|
| New financial assets: acquisition, granting, origination,... |
649 |
(1) |
| Derecognition: disposal, repayment, maturity. |
(8,194) |
3 |
| Write-off |
|
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
| Changes in models' credit risk parameters during the
period |
|
|
| Changes in model / methodology |
|
|
| Changes in scope |
124 |
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
| Other |
215 |
|
| Total |
9,701 |
(6) |
| Changes in carrying amount due to specific accounting
assessment methods (with no
significant impact on loss allowance) (1) |
(1) |
|
| Balance at 31 December 2018 |
9,700 |
(6) |
| Contractual amount outstanding of financial assets written
off during the period,
that are still subject to enforcement measures
|
|
|
(1)
Includes the impacts of the use of the EIR method (notably the amortisation of premiums/discounts).
► Financing commitments
|
|
Performing commitments |
Provisioned commitments
(Bucket 3) |
|
|
Commitments subject
to 12 month ECL (Bucket 1) |
Commitments subject
to lifetime ECL (Bucket 2) |
|
|
| € million |
Amount of commitment |
Loss allowance |
Amount of commitment |
Loss allowance |
Amount of commitment |
Loss allowance |
| Balance at 1 January 2018 |
109,566 |
(48) |
4,753 |
(207) |
441 |
(115) |
| Transfer between buckets during the period |
(277) |
(14) |
276 |
12 |
|
(3) |
| Transfer from 12 month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
(799) |
4 |
799 |
(6) |
|
|
| Return to lifetime ECL (Bucket 2) from 12 month ECL (Bucket
1) |
522 |
(18) |
(523) |
18 |
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
|
|
|
|
(3) |
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12 month
ECL (Bucket 1)
|
|
|
|
|
|
|
| Total after transfer |
109,289 |
(62) |
5,029 |
(195) |
441 |
(118) |
| Changes in commitments and loss allowances |
16,580 |
(13) |
(1,512) |
35 |
(407) |
115 |
| New commitments given |
48,146 |
(55) |
771 |
(126) |
|
|
| End of commitments |
(34,218) |
43 |
(2,365) |
165 |
(339) |
74 |
| Write-off |
|
|
|
|
(42) |
42 |
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
|
|
|
| Changes in models' credit risk parameters during the
period |
|
|
|
|
|
(1) |
| Changes in model / methodology |
|
|
|
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
|
|
|
| Other |
2,652 |
(1) |
82 |
(4) |
(26) |
|
| Balance at 31 December 2018 |
125,869 |
(75) |
3,517 |
(160) |
34 |
(3) |
|
|
Total |
| € million |
Amount of commitment (a) |
Loss allowance (b) |
Net amount of commitment (a) +
(b) |
| Balance at 1 January 2018 |
114,760 |
(370) |
114,390 |
| Transfer between buckets during the period |
(1) |
(5) |
|
| Transfer from 12 month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
(2) |
|
| Return to lifetime ECL (Bucket 2) from 12 month ECL (Bucket
1) |
(1) |
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
(3) |
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12 month
ECL (Bucket 1)
|
|
|
|
| Total after transfer |
114,759 |
(375) |
114,384 |
| Changes in commitments and loss allowances |
14,661 |
137 |
|
| New commitments given |
48,917 |
(181) |
|
| End of commitments |
(36,922) |
282 |
|
| Write-off |
(42) |
42 |
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
| Changes in models' credit risk parameters during the
period |
|
(1) |
|
| Changes in model / methodology |
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
| Other |
2,708 |
(5) |
|
| Balance at 31 December 2018 |
129,420 |
(238) |
129,182 |
► Guarantee commitments
|
|
Performing commitments |
Provisioned commitments
(Bucket 3) |
|
|
Commitments subject
to 12-month ECL (Bucket 1) |
Commitments subject
to lifetime ECL (Bucket 2) |
|
|
| € million |
Amount of commitment |
Loss allowance |
Amount of commitment |
Loss allowance |
Amount of commitment |
Loss allowance |
| Balance at 1 January 2018 |
49,412 |
(10) |
3,112 |
(41) |
523 |
(106) |
| Transfer between buckets during the period |
(364) |
(2) |
278 |
4 |
86 |
(31) |
| Transfer from 12 month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
(758) |
1 |
758 |
(1) |
|
|
| Return to lifetime ECL (Bucket 2) from 12 month ECL (Bucket
1) |
473 |
(3) |
(473) |
3 |
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
(81) |
|
(7) |
2 |
88 |
(31) |
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
2 |
|
|
|
(2) |
|
| Total after transfer |
49,048 |
(12) |
3,390 |
(37) |
609 |
(137) |
| Changes in commitments and loss allowances |
(2,337) |
(2) |
(535) |
9 |
(305) |
45 |
| New commitments given |
16,039 |
(11) |
456 |
(19) |
|
|
| End of commitments |
(19,165) |
11 |
(1,158) |
28 |
(298) |
90 |
| Write-off |
|
|
|
|
|
1 |
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
|
|
|
| Changes in models' credit risk parameters during the
period |
|
|
|
|
|
(46) |
| Changes in model / methodology |
|
|
|
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
|
|
|
| Other |
789 |
(2) |
167 |
|
(7) |
|
| Balance at 31 December 2018 |
46,711 |
(14) |
2,855 |
(28) |
304 |
(92) |
|
|
Total |
| € million |
Amount of commitment (a) |
Loss allowance (b) |
Net amount of commitment (a) +
(b) |
| Balance at 1 January 2018 |
53,047 |
(157) |
52,890 |
| Transfer between buckets during the period |
|
(29) |
|
| Transfer from 12 month ECL (Bucket 1) to lifetime ECL
(Bucket 2) |
|
|
|
| Return to lifetime ECL (Bucket 2) from 12 month ECL (Bucket
1) |
|
|
|
| Transfer to lifetime ECL impaired (Bucket 3) |
|
(29) |
|
| Return from lifetime ECL impaired (Bucket 3) to lifetime
ECL (Bucket 2) / 12-month
ECL (Bucket 1)
|
|
|
|
| Total after transfer |
53,047 |
(186) |
52,861 |
| Changes in commitments and loss allowances |
(3,177) |
52 |
|
| New commitments given |
16,495 |
(30) |
|
| End of commitments |
(20,621) |
129 |
|
| Write-off |
|
1 |
|
| Changes of cash flows resulting in restructuring due
to financial difficulties |
|
|
|
| Changes in models' credit risk parameters during the
period |
|
(46) |
|
| Changes in model / methodology |
|
|
|
| Transfers in non-current assets held for sale and discontinued
operations |
|
|
|
| Other |
949 |
(2) |
|
| Balance at 31 December 2018 |
49,870 |
(134) |
49,736 |
► Impairment deducted
from financial assets at 31 December 2017
| € million |
31.12.2016 |
Changes in scope |
Depreciation |
Reversals and utilisations |
Translation adjust ments |
Other movements |
| Loans and receivables due from credit institutions |
431 |
|
1 |
(5) |
(41) |
(3) |
| Loans and receivables due from customers |
3,686 |
|
664 |
(968) |
(296) |
(10) |
| Of which collective impairment |
1,357 |
|
2 |
(297) |
(111) |
|
| Finance leases |
|
|
|
|
|
|
| Held-to-maturity securities |
|
|
|
|
|
|
| Available-for-sale financial assets |
311 |
|
3 |
(61) |
(12) |
2 |
| Other financial assets |
77 |
|
14 |
(35) |
(5) |
(16) |
| Total impairment of financial assets |
4,505 |
|
682 |
(1,069) |
(354) |
(27) |
| € million |
31.12.2017 |
| Loans and receivables due from credit institutions |
383 |
| Loans and receivables due from customers |
3,076 |
| Of which collective impairment |
951 |
| Finance leases |
|
| Held-to-maturity securities |
|
| Available-for-sale financial assets |
243 |
| Other financial assets |
35 |
| Total impairment of financial assets |
3,737 |
3.1.1 MAXIMUM
EXPOSURE TO CREDIT RISK
The maximum exposure to credit risk of an entity corresponds to the carrying amount,
net of any loss of recorded value and not taking account of assets held as collateral
or other credit enhancements (for example, offsetting agreements which do not meet
the offsetting conditions according to IAS 32).
The tables below present maximum exposures and the amount of assets held as collateral
and other credit enhancement techniques which make it possible to reduce this exposure.
Assets impaired at the reporting date correspond to impaired assets (Bucket 3).
► Financial assets
not subject to impairment requirements (accounted at fair value
through profit or loss)
|
|
31.12.2018 |
|
|
|
Credit risk mitigation |
|
|
|
Collateral held as
security |
Other credit enhancement |
| € million |
Maximum exposure to credit risk |
Financial instruments provided
as collateral |
Mortgages |
Pledged securities |
Financial guarantees |
Credit derivatives |
| Financial assets at fair value through profit or loss
(excluding equity securities
and assets backing unit-linked contracts)
|
237,896 |
|
1,906 |
472 |
35 |
|
| Financial assets held for trading |
237,783 |
|
|
383 |
|
|
| Debt instruments that do not meet the conditions of the
"SPPI" test |
113 |
|
1,906 |
89 |
35 |
|
| Financial assets designated at fair value through profit
or loss |
|
|
|
|
|
|
| Hedging derivative Instruments |
965 |
|
|
506 |
|
|
| Total |
238,861 |
|
1,906 |
978 |
35 |
|
► Financial assets
subject to impairment requirements
|
|
31.12.2018 |
|
|
|
Credit risk mitigation |
|
|
|
Collateral held as
security |
Other credit enhancement |
| € million |
Maximum exposure to credit risk |
Financial instruments provided
as collateral |
Mortgages |
Pledged securities |
Financial guarantees |
Credit derivatives |
| Financial assets at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
9,700 |
|
|
|
|
|
| of which impaired assets at the reporting date |
|
|
|
|
|
|
| Loans and receivables due from credit institutions |
|
|
|
|
|
|
| of which impaired assets at the reporting date |
|
|
|
|
|
|
| Loans and receivables due from customers |
|
|
|
|
|
|
| of which impaired assets at the reporting date |
|
|
|
|
|
|
| Debt securities |
9,700 |
|
|
|
|
|
| of which impaired assets at the reporting date |
|
|
|
|
|
|
| Financial assets at amortised cost |
181,355 |
|
36,256 |
2,512 |
28,939 |
387 |
| of which impaired assets at the reporting date |
1,502 |
|
674 |
|
204 |
|
| Loans and receivables due from credit institutions |
19,156 |
|
|
137 |
3,473 |
|
| of which impaired assets at the reporting date |
20 |
|
|
|
47 |
|
| Loans and receivables due from customers |
134,302 |
|
36,256 |
2,375 |
25,466 |
387 |
| of which impaired assets at the reporting date |
1,469 |
|
674 |
|
157 |
|
| Debt securities |
27,897 |
|
|
|
|
|
| of which impaired assets at the reporting date |
12 |
|
|
|
|
|
| Total |
191,055 |
|
36,256 |
2,512 |
28,939 |
387 |
| of which impaired assets at the reporting date |
1,502 |
|
674
|
|
204 |
|
► Engagements
hors bilan soumis aux exigences de dépréciation
|
|
31.12.2018 |
|
|
|
Credit risk mitigation |
|
|
|
Collateral held as
security |
Other credit enhancement |
| € million |
Maximum exposure to credit risk |
Financial instruments provided
as collateral |
Mortgages |
Pledged securities |
Financial guarantees |
Credit derivatives |
| Guarantee commitments |
49,736 |
|
|
205 |
2,454 |
4 |
| of which provisioned commitments at the reporting date |
213 |
|
|
24 |
9 |
|
| Financing commitments |
129,182 |
|
101 |
334 |
11,735 |
4,409 |
| of which provisioned commitments at the reporting date |
31 |
|
|
|
1 |
|
| Total |
178,918 |
|
101 |
539 |
14,189 |
4,413 |
| of which provisioned commitments at the reporting date |
244 |
|
|
24 |
10 |
|
A description of the assets held as collateral is presented in note 8. "Financing
and guarantee commitments and other guarantees".
♦ Maximum exposure
to credit risk at 31 December 2017
An entity's maximum exposure to credit risk is the gross carrying amount, net of
any
offset amount and any recognised loss of value.
| € million |
31.12.2017 |
| Financial assets at fair value through profit or loss
(excluding equity securities
and assets backing unit-linked contracts)
|
233,516 |
| Hedging derivative instruments |
1,101 |
| Available-for-sale financial assets (excluding equity
securities) |
25,753 |
| Loans, receivables and security deposits due from credit
institutions (excluding Crédit
Agricole internal transactions)
|
40,532 |
| Loans, receivables and security deposits due from customers |
140,661 |
| Exposure to on-balance sheet commitments (net of impairment
losses) |
441,563 |
| Financing commitments given (excluding Crédit Agricole
internal operations) |
114,729 |
| Financial guarantee commitments given (excluding Crédit
Agricole internal operations) |
53,047 |
| Provisions - Financing commitments |
(221) |
| Exposure to off-balance sheet financing commitments (net
of provisions) |
167,555 |
| Maximum exposure to Credit Risk |
609,118 |
Guarantees and other credit enhancements amount to:
| € million |
31.12.2017 |
| Loans and receivables due from credit institutions (excluding
Crédit Agricole internal
transactions)
|
2,216 |
| Loans and receivables due from customers |
70,405 |
| Financing commitments given (excluding Crédit Agricole
internal operations) |
12,000 |
| Guarantee commitments given (excluding Crédit Agricole
internal operations) |
1,881 |
| Total |
86,502 |
An analysis of risk by type of concentration provides information on diversification
of risk exposure.
3.1.2 CONCENTRATIONS
OF CREDIT RISK
The carrying amounts and commitments are presented net of impairment and provisions.
♦ Exposure to
credit risk by category of Credit risk
The categories of credit risk are presented by intervals of likelihood of default.
The correspondence between the internal ratings and the intervals of likelihood of
default is set out in the chapter "Risk factors and pillar 3 - Credit risk management"
of the Crédit Agricole CIB reference document.
► Financial assets
at amortised cost
|
|
31.12.2018 |
|
|
|
Carrying amount |
|
|
|
Performing assets |
| € million |
Credit risk rating grades |
Assets subject to 12 month ECL
(Bucket 1) |
Assets subject to lifetime ECL
(Bucket 2) |
Credit-impaired assets (Bucket
3) |
Total |
| Corporate customers (1) |
PD ≤ 0,6% |
120,857 |
5,284 |
|
126,141 |
|
|
0,6% < PD ≤ 12% |
35,536 |
5,670 |
|
41,206 |
|
|
12% < PD < 100% |
|
1,135 |
|
1,135 |
|
|
PD = 100% |
|
|
3,563 |
3,563 |
| Total corporate customers |
|
156,393 |
12,089 |
3,563 |
172,045 |
| Non-corporate customers (2) |
PD ≤ 0,5% |
10,639 |
40 |
|
10,679 |
|
|
0,5% < PD ≤ 2% |
398 |
3 |
|
401 |
|
|
2% < PD ≤ 20% |
493 |
32 |
|
525 |
|
|
20% < PD < 100% |
366 |
|
|
366 |
|
|
PD = 100% |
|
|
100 |
100 |
| Total non-corporate customers |
|
11,896 |
75 |
100 |
12,071 |
| Impairment |
|
(151) |
(433) |
(2,161) |
(2,745) |
| Total |
|
168,138 |
11,731 |
1,502 |
181,371 |
(1)
Corporate clients include general government, credit institutions, central banks,
financial firms and other non-financial businesses
(2)
The non-corporate clients correspond to professional clients, small businesses and
households mainly related to the activity of the private bank.
► Financial assets
at fair value through other comprehensive income that may be reclassified
to profit or loss
|
|
31.12.2108 |
|
|
|
Carrying amount |
|
|
|
Performing assets |
| € million |
Credit risk rating grades |
Assets subject to 12 month ECL
(Bucket 1) |
Assets subject to lifetime ECL
(Bucket 2) |
Credit-impaired assets (Bucket
3) |
Total |
| Corporate customers (1) |
PD ≤ 0,6% |
9,572 |
|
|
9,572 |
|
|
0,6% < PD ≤ 12% |
128 |
|
|
128 |
|
|
12% < PD < 100% |
|
|
|
|
|
|
PD = 100% |
|
|
|
|
| Total corporate customers |
|
9,700 |
|
|
9,700 |
| Non-corporate customers (2) |
PD ≤ 0,5% |
|
|
|
|
|
|
0,5% < PD ≤ 2% |
|
|
|
|
|
|
2% < PD ≤ 20% |
|
|
|
|
|
|
20% < PD ≤ 100% |
|
|
|
|
|
|
PD = 100% |
|
|
|
|
| Total non-corporate customers |
|
|
|
|
9,700 |
| Total |
|
9,700 |
|
|
9,700 |
(1)
Corporate clients include general government, credit institutions, central banks,
financial firms and other non-financial businesses
(2)
The non-corporate clients correspond to professional clients, small businesses and
households mainly related to the activity of the private bank.
► Financing commitments
|
|
31.12.2018 |
|
|
|
Amount of commitment |
|
|
|
|
Performing commitments |
|
|
| € million |
Credit risk rating grades |
Commitments subject to 12-month
ECL |
Commitments subject to lifetime
ECL (Bucket 2) |
Provisioned commitments (Bucket
3) |
Total |
| Corporate customers (1) |
PD ≤ 0,6% |
(Bucket 1) |
Commitments subject to lifetime EcL |
|
122,254 |
|
|
0,6% < PD ≤ 12% |
(Bucket 2) |
535 |
|
5,294 |
|
|
12% < PD < 100% |
|
30 |
|
30 |
|
|
PD = 100% |
|
|
34 |
34 |
| Total corporate customers |
|
124,062 |
3,516 |
34 |
127,612 |
| Non-corporate customers (2) |
PD ≤ 0,5% |
1,809 |
|
|
1,809 |
|
|
0,5% < PD ≤ 2% |
|
|
|
|
|
|
2% < PD ≤ 20% |
|
|
|
|
|
|
20% < PD < 100% |
|
|
|
|
|
|
PD = 100% |
|
|
|
|
| Total non-corporate customers |
|
1,809 |
|
|
1,809 |
| Provisions (3) |
|
(76) |
(160) |
(3) |
(239) |
| Total |
|
125,795 |
3,356 |
31 |
129,182 |
(1)
Corporate clients include general government, credit institutions, central banks,
financial firms and other non-financial businesses.
(2)
The non-corporate clients correspond to professional clients, small businesses and
households mainly related to the activity of the private bank.
(3)
Expected or recorded losses in respect of off-balance sheet commitments are covered
by provisions recognised as liabilities.
► Guarantee commitments
|
|
31.12.2018 |
|
|
|
Amount of commitment |
|
|
|
Performing |
commitments |
|
|
| € million |
Credit risk rating grades |
Commitments subject to 12 month
ECL |
Commitments subject to lifetime
ECL (Bucket 2) |
Provisioned commitments (Bucket
3) |
Total |
| Corporate customers (1) |
PD ≤ 0,6% |
45,260 |
2,138 |
|
47,398 |
|
|
0,6% < PD ≤ 12% |
737 |
712 |
|
1,449 |
|
|
12% < PD < 100% |
|
4 |
|
4 |
|
|
PD = 100% |
|
|
305 |
305 |
| Total corporate customers |
|
45,997 |
2,854 |
305 |
49,156 |
| Non-corporate customers (2) |
PD ≤ 0,5% |
713 |
|
|
713 |
|
|
0,5% < PD ≤ 2% |
|
|
|
|
|
|
2% < PD ≤ 20% |
|
|
|
|
|
|
20% < PD <100% |
|
|
|
|
|
|
PD = 100% |
|
|
|
|
| Total non-corporate customers |
|
713 |
|
|
713 |
| Provisions (3) |
|
(14) |
(27) |
(92) |
(133) |
| Total |
|
46,696 |
2,827 |
213 |
49,736 |
(1)
Corporate clients include general government, credit institutions, central banks,
financial firms and other non-financial businesses.
(2)
The non-corporate clients correspond to professional clients, small businesses and
households mainly related to the activity of the private bank.
(3)
Expected or recorded losses in respect of off-balance sheet commitments are covered
by provisions recognised as liabilities.
3.1.3 CREDIT RISK
CONCENTRATIONS BY CUSTOMER TYPE
► Financial assets
at amortised cost by customer type
|
|
31.12.2018 |
|
|
Carrying amount |
|
|
Performing assets |
|
|
| € million |
Assets subject to 12 month ECL
(Bucket 1) |
Assets subject to life time ECL
(Bucket 2) |
Credit-impaired assets (Bucket
3) |
Total |
| General administration |
15,027 |
87 |
83 |
15,197 |
| Central banks |
2,327 |
|
|
2,327 |
| Credit institutions |
22,152 |
54 |
411 |
22,617 |
| Large corporates |
116,889 |
11,947 |
3,069 |
131,905 |
| Retail customers |
11,896 |
75 |
100 |
12,071 |
| Impairment |
(151) |
(434) |
(2,161) |
(2,746) |
| Total |
168,140 |
11,729 |
1,502 |
181,371 |
► Financial assets
at fair value through recyclable equity, by customer type
|
|
31.12.2018 |
|
|
Carrying amount |
|
|
Performing assets |
|
|
| € million |
Assets subject to 12 month ECL
(Bucket 1) |
Assets subject to lifetime ECL
(Bucket 2) |
Credit-impaired assets (Bucket
3) |
Total |
| General administration |
5,714 |
|
|
5,714 |
| Central banks |
|
|
|
|
| Credit institutions |
3,274 |
|
|
3,274 |
| Large corporates |
712 |
|
|
712 |
| Retail customers |
|
|
|
|
| Total |
9,700 |
|
|
9,700 |
► Due to customers
by customer type
| € million |
31.12.2018 |
31.12.2017 |
| General administration |
13,493 |
12,768 |
| Large corporates |
89,691 |
76,673 |
| Retail customers |
20,326 |
17,518 |
| Total amount due to customers |
123,510 |
106,960 |
► Financing commitments
by customer type
|
|
31.12.2018 |
|
|
Amount of commitment |
|
|
Performing commitments |
|
|
| € million |
Commitments subject to 12 month
ECL (Bucket 1) |
Commitments subject to lifetime
ECL (Bucket 2) |
Provisioned commitments (Bucket
3) |
Total |
| General administration |
3,943 |
1 |
|
3,944 |
| Central banks |
641 |
|
|
641 |
| Credit institutions |
20,382 |
|
|
20,382 |
| Large corporates |
99,096 |
3,515 |
34 |
102,645 |
| Retail customers |
1,809 |
|
|
1,809 |
| Provisions (1) |
(76) |
(160) |
(3) |
(239) |
| Total |
125,795 |
3,356 |
31 |
129,182 |
(1)
Expected or recorded losses in respect of off-balance sheet commitments are covered
by provisions recognised as liabilities.
► Garantee commitments
by customer type
|
|
31.12.2018 |
|
|
Amount of commitment |
|
|
Performing commitments |
|
|
| € million |
Commitments subject to 12 month
ECL (Bucket 1) |
Commitments subject to lifetime
ECL (Bucket 2) |
Provisioned commitments (Bucket
3) |
Total |
| General administration |
46 |
6 |
|
52 |
| Central banks |
568 |
|
|
568 |
| Credit institutions |
6,353 |
25 |
|
6,378 |
| Large corporates |
39,030 |
2,823 |
305 |
42,158 |
| Retail customers |
713 |
|
|
713 |
| Provisions (1) |
(14) |
(27) |
(92) |
(133) |
| Total |
46,696 |
2,827 |
213 |
49,736 |
(1)
Expected or recorded losses in respect of off-balance sheet commitments are covered
by provisions recognised as liabilities.
► Loans and receivables
due from credit institutions and due from customers by type
at 31 December 20177
|
|
31.12.2017 |
| € million |
Gross outstanding |
of which gross loans and receivables
individually impaired |
Individual impairment |
Collective impairment |
Total |
| General administration |
4,711 |
86 |
(18) |
(28) |
4,665 |
| Central banks |
26,182 |
407 |
(383) |
|
25,799 |
| Credit institutions |
469 |
|
|
|
469 |
| Large corporates |
123,590 |
3,643 |
(2,096) |
(923) |
120,571 |
| Retail customers |
9,815 |
203 |
(11) |
|
9,804 |
| Total loans and re-ceivables due from credit institutions
and due from customers (1) |
164,767 |
4,339 |
(2,508) |
(951) |
161,308 |
(1)
Of which restructured outstandings for €4,824 million.
► Commitments
given to customers by customer type at 31 December 2017
| € million |
31.12.2017 |
| Financing commitments given to customers |
|
| General administration |
1,801 |
| Large corporates |
90,107 |
| Retail customers |
1,176 |
| Total loan commitments |
93,084 |
| Guarantee commitments given to customers |
|
| General administration |
3 |
| Large corporates |
46,189 |
| Retail customers |
684 |
| Total guarantee commitments |
46,876 |
3.1.4 CREDIT RISK
CONCENTRATIONS BY GEOGRAPHICAL AREA
► Financial assets
at amortised cost by geographical area
|
|
31.12.2018 |
|
|
Carrying amount |
|
|
Performing assets |
|
|
| € million |
Assets subject to 12 month ECL
(Bucket 1) |
Assets subject to lifetime ECL
(Bucket 2) |
Credit-impaired assets (Bucket
3) |
Total |
| France (including overseas departments and territories) |
38,544 |
1,466 |
537 |
40,547 |
| Other European Union countries |
39,688 |
2,775 |
886 |
43,349 |
| Other European countries |
12,572 |
922 |
203 |
13,697 |
| North America |
30,156 |
854 |
121 |
31,131 |
| Central and South America |
8,699 |
1,573 |
708 |
10,980 |
| Africa and Middle East |
8,590 |
1,570 |
895 |
11,055 |
| Asia-Pacific (ex. Japan) |
24,151 |
2,716 |
313 |
27,180 |
| Japan |
4,738 |
288 |
|
5,026 |
| Supranational organisations |
1,152 |
|
|
1,152 |
| Impairment |
(151) |
(434) |
(2,161) |
(2,746) |
| Total |
168,139 |
11,730 |
1,502 |
181,371 |
► Financial assets
at fair value through recyclable equity, by geographic area
|
|
31.12.2018 |
|
|
Carrying amount |
|
|
Performing assets |
|
|
| € million |
Assets subject to 12 month ECL
(Bucket 1) |
Assets subject to lifetime ECL
(Bucket 2) |
Credit-impaired assets (Bucket
3) |
Total |
| France (including overseas departments and territories) |
2,833 |
|
|
2,833 |
| Other European Union countries |
3,100 |
|
|
3,100 |
| Other European countries |
459 |
|
|
459 |
| North America |
1,357 |
|
|
1,357 |
| Central and South America |
|
|
|
|
| Africa and Middle East |
28 |
|
|
28 |
| Asia-Pacific (ex. Japan) |
300 |
|
|
300 |
| Japan |
286 |
|
|
286 |
| Supranational organisations |
1,337 |
|
|
1,337 |
| Total |
9,700 |
|
|
9,700 |
3.1.5 DUE TO CUSTOMERS
BY GEOGRAPHICAL AREA
| € million |
31.12.2018 |
31.12.2017 |
| France (including overseas departments and territories) |
22,697 |
23,803 |
| Other European Union countries |
38,377 |
31,938 |
| Other European countries |
12,708 |
9,623 |
| North America |
13,669 |
12,257 |
| Central and South America |
3,899 |
5,012 |
| Africa and Middle East |
5,824 |
6,146 |
| Asia-Pacific (ex. Japan) |
12,630 |
10,359 |
| Japan |
13,622 |
7,584 |
| Supranational organisations |
84 |
238 |
| Total amount due to customers |
123,510 |
106,960 |
► Financing commitments
by geographical area
|
|
31.12.2018 |
|
|
Amount of commitment |
|
|
Performing commitments |
|
|
| € million |
Commitments subject to 12 month
ECL (Bucket 1) |
Commitments subject to lifetime
ECL (Bucket 2) |
Provisioned commitments (Bucket
3) |
Total |
| France (including overseas departments and territories) |
39,697 |
435 |
2 |
40,134 |
| Other European Union countries |
35,327 |
1,216 |
5 |
36,548 |
| Other European countries |
5,175 |
224 |
11 |
5,410 |
| North America (1) |
26,576 |
1,159 |
13 |
27,748 |
| Central and South America |
3,158 |
149 |
|
3,307 |
| Africa and Middle East |
4,955 |
131 |
3 |
5,089 |
| Asia-Pacific (ex. Japan) |
7,393 |
202 |
|
7,595 |
| Japan |
3,590 |
|
|
3,590 |
| Supranational organisations |
|
|
|
|
| Provisions (1) |
(76) |
(160) |
(3) |
(239) |
| Total |
125,795 |
3,356 |
31 |
129,182 |
(1)
Expected or recorded losses in respect of off-balance sheet commitments are covered
by provisions recognised as liabilities.
► Garantee commitments
by geographical area
|
|
31.12.2018 |
|
|
Amount of commitment |
|
|
Performing commitments |
|
|
| € million |
Commitments subject to 12 month
ECL (Bucket 1) |
Commitments subject to lifetime
ECL (Bucket 2) |
Provisioned commitments (Bucket
3) |
Total |
| France (including overseas departments and territories) |
10,066 |
283 |
36 |
10,385 |
| Other European Union countries |
12,215 |
1,020 |
172 |
13,407 |
| Other European countries |
4,095 |
632 |
|
4,727 |
| North America |
9,821 |
312 |
24 |
10,157 |
| Central and South America |
1,344 |
18 |
31 |
1,393 |
| Africa and Middle East |
2,492 |
58 |
42 |
2,592 |
| Asia-Pacific (ex. Japan) |
5,122 |
298 |
|
5,420 |
| Japan |
1,555 |
233 |
|
1,788 |
| Supranational organisations |
|
|
|
|
| Provisions (1) |
(14) |
(27) |
(92) |
(133) |
| Total |
46,696 |
2,827 |
213 |
49,736 |
(1)
Expected or recorded losses in respect of off-balance sheet commitments are covered
by provisions recognised as liabilities.
► Loans and receivables
due from credit institutions and due from customers by geographical
area at 31 December 2017
|
|
31.12.2017 |
| € million |
Gross outstanding |
of which gross loans and receivables
individually impaired |
Individual impairment |
Collective impairment |
Total |
| France (including overseas departments and territories) |
43,740 |
591 |
(300) |
(88) |
43,352 |
| Other European Union countries |
36,751 |
1,171 |
(508) |
(274) |
35,969 |
| Other European countries |
11,380 |
263 |
(185) |
(65) |
11,130 |
| North America |
24,873 |
151 |
(52) |
(246) |
24,575 |
| Central and South America |
11,567 |
963 |
(755) |
(59) |
10,753 |
| Africa and Middle East |
9,472 |
755 |
(553) |
(100) |
8,819 |
| Asia-Pacific (excluding Japan) |
23,751 |
426 |
(155) |
(115) |
23,481 |
| Japan |
3,233 |
19 |
|
(4) |
3,229 |
| Total loans and receivables due from credit institutions
and due from customers |
164,767 |
4,339 |
(2,508) |
(951) |
161,308 |
► Commitments
given to customers: geographical analysis at 31 December 2017
| € million |
31.12.2017 |
| Financing commitments given to customers |
|
| France (including overseas departments and territories) |
26,420 |
| Other European Union countries |
27,661 |
| Other European countries |
4,049 |
| North America |
19,524 |
| Central and South America |
5,689 |
| Africa and Middle East |
2,865 |
| Asia-Pacific (excluding Japan) |
5,900 |
| Japan |
976 |
| Total financing Commitments |
93,084 |
| Guarantee commitments given to customers |
|
| France (including overseas departments and territories) |
17,410 |
| Other European Union countries |
11,185 |
| Other European countries |
3,286 |
| North America |
7,496 |
| Central and South America |
1,118 |
| Africa and Middle East |
794 |
| Asia-Pacific (excluding Japan) |
3,914 |
| Japan |
1,673 |
| Total guarantee Commitments |
46,876 |
3.2 Market risk
3.2.1 DERIVATIVE
INSTRUMENTS: ANALYSIS BY REMAINING MATURITY
The breakdown of market values of derivative instruments is shown by remaining
contractual
maturity.
► Hedging derivative
instruments - Fair value of assets
|
|
31.12.2018 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
|
|
|
605 |
72 |
28 |
| Futures |
|
|
|
|
|
|
| FRAs |
|
|
|
|
|
|
| Interest rate swaps |
|
|
|
605 |
72 |
28 |
| Interest rate options |
|
|
|
|
|
|
| Caps - floors - collars |
|
|
|
|
|
|
| Other options |
|
|
|
|
|
|
| Currency instruments |
|
|
|
45 |
1 |
|
| Currency futures |
|
|
|
45 |
1 |
|
| Currency options |
|
|
|
|
|
|
| Other instruments |
|
|
|
46 |
|
|
| Other |
|
|
|
46 |
|
|
| Subtotal |
|
|
|
696 |
73 |
28 |
| Forward currency transactions |
|
|
|
168 |
|
|
| Total fair value of hedging derivatives - Assets |
|
|
|
864 |
73 |
28 |
|
|
31.12.2018 |
| € million |
Total market value |
| Interest rate instruments |
705 |
| Futures |
|
| FRAs |
|
| Interest rate swaps |
705 |
| Interest rate options |
|
| Caps - floors - collars |
|
| Other options |
|
| Currency instruments |
46 |
| Currency futures |
46 |
| Currency options |
|
| Other instruments |
46 |
| Other |
46 |
| Subtotal |
797 |
| Forward currency transactions |
168 |
| Total fair value of hedging derivatives - Assets |
965 |
|
|
31.12.2017 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
|
|
|
625 |
14 |
8 |
| Futures |
|
|
|
|
|
|
| FRAs |
|
|
|
|
|
|
| Interest rate swaps |
|
|
|
625 |
14 |
8 |
| Interest rate options |
|
|
|
|
|
|
| Caps - floors - collars |
|
|
|
|
|
|
| Other options |
|
|
|
|
|
|
| Currency and gold instruments |
|
|
|
132 |
12 |
|
| Currency futures |
|
|
|
128 |
12 |
|
| Currency options |
|
|
|
4 |
|
|
| Other instruments |
|
|
|
73 |
|
|
| Equity and index derivatives |
|
|
|
73 |
|
|
| Precious metals derivatives |
|
|
|
|
|
|
| Commodity derivatives |
|
|
|
|
|
|
| Credit derivatives |
|
|
|
|
|
|
| Others |
|
|
|
|
|
|
| Subtotal |
|
|
|
830 |
26 |
8 |
| Forward currency transactions |
|
|
|
237 |
|
|
| Total fair value of hedging derivatives - Assets |
|
|
|
1,067 |
26 |
8 |
|
|
31.12.2017 |
| € million |
Total market value |
| Interest rate instruments |
647 |
| Futures |
|
| FRAs |
|
| Interest rate swaps |
647 |
| Interest rate options |
|
| Caps - floors - collars |
|
| Other options |
|
| Currency and gold instruments |
144 |
| Currency futures |
140 |
| Currency options |
4 |
| Other instruments |
73 |
| Equity and index derivatives |
73 |
| Precious metals derivatives |
|
| Commodity derivatives |
|
| Credit derivatives |
|
| Others |
|
| Subtotal |
864 |
| Forward currency transactions |
237 |
| Total fair value of hedging derivatives - Assets |
1,101 |
► Hedging derivative
instruments - fair value of liabilities
|
|
31.12.2018 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
|
|
|
594 |
60 |
34 |
| Futures |
|
|
|
|
|
|
| FRAs |
|
|
|
|
|
|
| Interest rate swaps |
|
|
|
594 |
60 |
34 |
| Interest rate options |
|
|
|
|
|
|
| Caps - floors - collars |
|
|
|
|
|
|
| Other options |
|
|
|
|
|
|
| Currency instruments |
|
|
|
85 |
|
|
| Currency futures |
|
|
|
85 |
|
|
| Currency options |
|
|
|
|
|
|
| Other instruments |
|
|
|
65 |
|
|
| Other |
|
|
|
65 |
|
|
| Subtotal |
|
|
|
744 |
60 |
34 |
| Forward currency transactions |
|
|
|
229 |
|
|
| Total fair value of hedging derivatives - Liabilities |
|
|
|
973 |
60 |
34 |
|
|
31.12.2018 |
| € million |
Total market value |
| Interest rate instruments |
688 |
| Futures |
|
| FRAs |
|
| Interest rate swaps |
688 |
| Interest rate options |
|
| Caps - floors - collars |
|
| Other options |
|
| Currency instruments |
85 |
| Currency futures |
85 |
| Currency options |
|
| Other instruments |
65 |
| Other |
65 |
| Subtotal |
838 |
| Forward currency transactions |
229 |
| Total fair value of hedging derivatives - Liabilities |
1,067 |
|
|
31.12.2017 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
|
|
|
604 |
25 |
2 |
| Futures |
|
|
|
|
|
|
| FRAs |
|
|
|
|
|
|
| Interest rate swaps |
|
|
|
603 |
25 |
2 |
| Interest rate options |
|
|
|
|
|
|
| Caps - floors - collars |
|
|
|
|
|
|
| Other options |
|
|
|
1 |
|
|
| Currency and gold instruments |
|
|
|
140 |
7 |
|
| Currency futures |
|
|
|
136 |
7 |
|
| Currency options |
|
|
|
4 |
|
|
| Other instruments |
|
|
|
35 |
|
|
| Equity and index derivatives |
|
|
|
35 |
|
|
| Precious metals derivatives |
|
|
|
|
|
|
| Commodity derivatives |
|
|
|
|
|
|
| Credit derivatives |
|
|
|
|
|
|
| Others |
|
|
|
|
|
|
| Subtotal |
|
|
|
779 |
32 |
2 |
| Forward currency transactions |
|
|
|
182 |
10 |
|
| Total fair value of hedging derivatives - Liabilities |
|
|
|
961 |
42 |
2 |
| € million |
Total market value |
| Interest rate instruments |
631 |
| Futures |
|
| FRAs |
|
| Interest rate swaps |
630 |
| Interest rate options |
|
| Caps - floors - collars |
|
| Other options |
1 |
| Currency and gold instruments |
147 |
| Currency futures |
143 |
| Currency options |
4 |
| Other instruments |
35 |
| Equity and index derivatives |
35 |
| Precious metals derivatives |
|
| Commodity derivatives |
|
| Credit derivatives |
|
| Others |
|
| Subtotal |
813 |
| Forward currency transactions |
192 |
| Total fair value of hedging derivatives - Liabilities |
1,005 |
► Derivative instruments
held for trading - Fair value of assets
|
|
31.12.2018 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
687 |
1,460 |
2,207 |
3,070 |
22,673 |
51,374 |
| Futures |
674 |
1,458 |
2,207 |
|
|
|
| FRAs |
|
|
|
3 |
|
|
| Interest rate swaps |
|
|
|
2,451 |
18,934 |
39,316 |
| Interest rate options |
|
|
|
160 |
1,948 |
10,732 |
| Caps - floors - collars |
|
|
|
456 |
1,791 |
1,326 |
| Other options |
13 |
2 |
|
|
|
|
| Currency |
29 |
|
|
3,997 |
2,483 |
2,703 |
| Currency futures |
29 |
|
|
2,935 |
1,610 |
2,230 |
| Currency options |
|
|
|
1,062 |
873 |
473 |
| Other instruments |
563 |
245 |
51 |
1,445 |
2,760 |
387 |
| Equity and index derivatives |
563 |
245 |
51 |
833 |
2,759 |
349 |
| Precious metal derivatives |
|
|
|
30 |
1 |
|
| Commodities derivatives |
|
|
|
|
|
|
| Credit derivatives |
|
|
|
528 |
|
35 |
| Other |
|
|
|
54 |
|
3 |
| Subtotal |
1,279 |
1,705 |
2,258 |
8,512 |
27,916 |
54,464 |
| Forward currency transactions |
|
|
|
10,813 |
1,156 |
49 |
| Total fair value of transaction derivatives - Assets |
1,279 |
1,705 |
2,258 |
19,325 |
29,072 |
54,513 |
|
|
31.12.2018 |
| € million |
Total market value |
| Interest rate instruments |
81,471 |
| Futures |
4,339 |
| FRAs |
3 |
| Interest rate swaps |
60,701 |
| Interest rate options |
12,840 |
| Caps - floors - collars |
3,573 |
| Other options |
15 |
| Currency |
9,212 |
| Currency futures |
6,804 |
| Currency options |
2,408 |
| Other instruments |
5,451 |
| Equity and index derivatives |
4,800 |
| Precious metal derivatives |
31 |
| Commodities derivatives |
|
| Credit derivatives |
563 |
| Other |
57 |
| Subtotal |
96,134 |
| Forward currency transactions |
12,018 |
| Total fair value of transaction derivatives - Assets |
108,152 |
|
|
31.12.2017 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
175 |
1,022 |
1,812 |
8,237 |
23,131 |
60,675 |
| Futures |
168 |
1,020 |
1,812 |
|
|
|
| FRAs |
|
|
|
258 |
95 |
|
| Interest rate swaps |
|
|
|
7,191 |
19,251 |
45,051 |
| Interest rate options |
|
|
|
148 |
1,638 |
14,242 |
| Caps - floors - collars |
|
|
|
640 |
2,147 |
1,382 |
| Other options |
7 |
2 |
|
|
|
|
| Currency |
15 |
|
|
3,454 |
3,007 |
2,407 |
| Currency futures |
3 |
|
|
3,039 |
2,027 |
1,605 |
| Currency options |
12 |
|
|
415 |
980 |
802 |
| Other instruments |
86 |
221 |
49 |
1,256 |
1,722 |
300 |
| Equity and index derivatives |
85 |
221 |
49 |
1,189 |
1,354 |
221 |
| Precious metal derivatives |
1 |
|
|
5 |
|
21 |
| Commodities derivatives |
|
|
|
|
|
|
| Credit derivatives |
|
|
|
62 |
368 |
58 |
| Subtotal |
276 |
1,243 |
1,861 |
12,947 |
27,860 |
63,382 |
| Forward currency transactions |
|
|
|
11,502 |
1,762 |
114 |
| Total fair value of transaction derivatives - Assets |
276 |
1,243 |
1,861 |
24,449 |
29,622 |
63,496 |
|
|
31.12.2017 |
| € million |
Total market value |
| Interest rate instruments |
95,052 |
| Futures |
3,000 |
| FRAs |
353 |
| Interest rate swaps |
71,493 |
| Interest rate options |
16,028 |
| Caps - floors - collars |
4,169 |
| Other options |
9 |
| Currency |
8,883 |
| Currency futures |
6,674 |
| Currency options |
2,209 |
| Other instruments |
3,634 |
| Equity and index derivatives |
3,119 |
| Precious metal derivatives |
27 |
| Commodities derivatives |
|
| Credit derivatives |
488 |
| Subtotal |
107,569 |
| Forward currency transactions |
13,378 |
| Total fair value of transaction derivatives - Assets |
120,947 |
► Derivative instruments
held for trading - Fair value of liabilities
|
|
31.12.2018 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
739 |
1,113 |
2,077 |
3,197 |
23,377 |
50,961 |
| Futures |
732 |
1,112 |
2,077 |
|
|
|
| FRAs |
|
|
|
|
|
|
| Interest rate swaps |
|
|
|
2,914 |
19,892 |
38,098 |
| Interest rate options |
|
|
|
132 |
1,608 |
10,795 |
| Caps - floors - collars |
|
|
|
150 |
1,877 |
2,068 |
| Other options |
7 |
1 |
|
1 |
|
|
| Currency |
103 |
|
|
3,492 |
2,229 |
2,299 |
| Currency futures |
103 |
|
|
2,457 |
1,931 |
1,920 |
| Currency options |
|
|
|
1,035 |
298 |
379 |
| Other instruments |
251 |
518 |
190 |
1,382 |
1,256 |
219 |
| Equity and index derivatives |
251 |
518 |
190 |
502 |
1,174 |
178 |
| Precious metal derivatives |
|
|
|
40 |
|
|
| Commodities derivatives |
|
|
|
|
|
|
| Credit derivatives |
|
|
|
760 |
82 |
41 |
| Other |
|
|
|
80 |
|
|
| Subtotal |
1,093 |
1,631 |
2,267 |
8,071 |
26,862 |
53,479 |
| Forward currency transactions |
|
|
|
11,442 |
1,917 |
16 |
| Total fair value of transaction derivatives - Liabilities |
1,093 |
1,631 |
2,267 |
19,513 |
28,779 |
53,495 |
|
|
31.12.2018 |
| € million |
Total market value |
| Interest rate instruments |
81,464 |
| Futures |
3,921 |
| FRAs |
|
| Interest rate swaps |
60,904 |
| Interest rate options |
12,535 |
| Caps - floors - collars |
4,095 |
| Other options |
9 |
| Currency |
8,123 |
| Currency futures |
6,411 |
| Currency options |
1,712 |
| Other instruments |
3,816 |
| Equity and index derivatives |
2,813 |
| Precious metal derivatives |
40 |
| Commodities derivatives |
|
| Credit derivatives |
883 |
| Other |
80 |
| Subtotal |
93,403 |
| Forward currency transactions |
13,375 |
| Total fair value of transaction derivatives - Liabilities |
106,778 |
|
|
31.12.2017 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
136 |
799 |
1,396 |
8,832 |
25,486 |
60,638 |
| Futures |
135 |
796 |
1,396 |
|
|
|
| FRAs |
|
|
|
263 |
89 |
|
| Interest rate swaps |
|
|
|
8,055 |
21,308 |
43,921 |
| Interest rate options |
|
|
|
115 |
1,686 |
14,576 |
| Caps - floors - collars |
|
|
|
397 |
2,403 |
2,141 |
| Other options |
1 |
3 |
|
2 |
|
|
| Currency and gold instruments |
34 |
|
|
3,631 |
2,332 |
1,966 |
| Currency futures |
|
|
|
2,860 |
2,052 |
1,414 |
| Currency options |
34 |
|
|
771 |
280 |
552 |
| Other instruments |
93 |
189 |
59 |
784 |
1,582 |
255 |
| Equity and index derivatives |
86 |
189 |
59 |
573 |
987 |
209 |
| Precious metal derivatives |
7 |
|
|
3 |
1 |
16 |
| Commodities derivatives |
|
|
|
|
|
|
| Credit derivatives and others |
|
|
|
208 |
594 |
30 |
| Subtotal |
263 |
988 |
1,455 |
13,247 |
29,400 |
62,859 |
| Forward currency transactions |
|
|
|
11,855 |
2,578 |
81 |
| Total fair value of transaction derivatives - Liabilities |
263 |
988 |
1,455 |
25,102 |
31,978 |
62,940 |
| € million |
Total market value |
| Interest rate instruments |
97,287 |
| Futures |
2,327 |
| FRAs |
352 |
| Interest rate swaps |
73,284 |
| Interest rate options |
16,377 |
| Caps - floors - collars |
4,941 |
| Other options |
6 |
| Currency and gold instruments |
7,963 |
| Currency futures |
6,326 |
| Currency options |
1,637 |
| Other instruments |
2,962 |
| Equity and index derivatives |
2,103 |
| Precious metal derivatives |
27 |
| Commodities derivatives |
|
| Credit derivatives and others |
832 |
| Subtotal |
108,212 |
| Forward currency transactions |
14,514 |
| Total fair value of transaction derivatives - Liabilities |
122,726 |
3.2.2 DERIVATIVE
INSTRUMENTS: TOTAL COMMITMENTS
| € million |
31.12.2018 |
31.12.2017 |
| Interest rate instruments |
10,899,580 |
11,022,373 |
| Futures |
2,630,775 |
7,295,162 |
| FRAs |
2,180 |
670 |
| Interest rate swaps |
6,885,811 |
2,419,149 |
| Interest rate options |
719,241 |
704,976 |
| Caps - floors - collars |
464,620 |
450,851 |
| Other options |
196,953 |
151,565 |
| Currency |
568,626 |
3,141,448 |
| Currency futures |
281,767 |
2,709,103 |
| Currency options |
286,859 |
432,345 |
| Other instruments |
82,446 |
84,110 |
| Equity and index derivatives |
45,574 |
51,074 |
| Precious metal derivatives |
4,433 |
861 |
| Commodities derivatives |
5 |
|
| Credit derivatives |
29,196 |
32,175 |
| Other |
3,238 |
|
| Subtotal |
11,550,652 |
14,247,931 |
| Forward currency transactions |
1,817,503 |
976,784 |
| Total notional amount |
13,368,155 |
15,224,715 |
3.3 Liquidity
and financing risk
(See chapter on "Risk factors - Asset/Liability Management")
3.3.1 LOANS AND
RECEIVABLES DUE FROM CREDIT INSTITUTIONS AND DUE FROM CUSTOMERS BY
RESIDUAL MATURITY
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Loans and receivables due from credit institutions (including
Crédit Agricole internal
transactions)
|
9,701 |
3,281 |
2,544 |
4,042 |
|
19,568 |
| Loans and receivables due from customers (including finance
leases) |
49,667 |
14,679 |
51,183 |
21,106 |
|
136,635 |
| Total |
59,368 |
17,960 |
53,727 |
25,148 |
|
156,203 |
| Impairment |
|
|
|
|
|
(2,729) |
| Total loans and receivables due from credit institutions
and from customers |
59,368 |
17,960 |
53,727 |
25,148 |
|
153,474 |
|
|
31.12.2017 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Loans and receivables due from credit institutions (including
Crédit Agricole internal
transactions)
|
13,303 |
9,031 |
2,300 |
2,018 |
|
26,652 |
| Loans and receivables due from customers (including finance
leases) |
56,270 |
14,535 |
45,893 |
21,417 |
|
138,115 |
| Total |
69,573 |
23,566 |
48,193 |
23,435 |
|
164,767 |
| Impairment |
|
|
|
|
|
(3,459) |
| Total loans and receivables due from credit institutions
and from customers |
|
|
|
|
|
161,308 |
► Due to credit
institutions and to customers by residual maturity
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Due to credit institutions (including Crédit Agricole
internal transactions) |
24,157 |
7,188 |
11,547 |
4,410 |
|
47,302 |
| Due to customers |
101,109 |
12,195 |
9,588 |
618 |
|
123,510 |
| Total amount due to credit institutions and to customers |
125,266 |
19,383 |
21,135 |
5,028 |
|
170,812 |
|
|
31.12.2017 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Due to credit institutions (including Crédit Agricole
internal transactions) |
18,702 |
7,223 |
13,966 |
4,111 |
|
44,002 |
| Due to customers |
101,278 |
4,382 |
967 |
333 |
|
106,960 |
| Total amount due to credit institutions and to customers |
119,980 |
11,605 |
14,933 |
4,444 |
|
150,962 |
► Debt securities
and subordinated debt
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Debt securities |
|
|
|
|
|
|
| Interest bearing notes |
|
|
|
|
|
|
| Interbank securities |
|
|
|
|
|
|
| Negotiable debt securities |
37,630 |
10,700 |
923 |
27 |
|
49,280 |
| Bonds |
|
|
1,662 |
599 |
|
2,261 |
| Other debt securities |
|
|
|
|
|
|
| Total debt securities |
37,630 |
10,700 |
2,585 |
626 |
|
51,541 |
| Subordinated debt |
|
|
|
|
|
|
| Dated subordinated debt |
|
|
|
2,989 |
|
2,989 |
| Undated subordinated debt |
1 |
|
|
1,969 |
|
1,970 |
| Mutual security deposits |
|
|
|
|
|
|
| Participating securities and loans |
|
|
|
|
|
|
| Total subordinated debt |
1 |
|
|
4,958 |
|
4,959 |
|
|
31.12.2017 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Debt securities |
|
|
|
|
|
|
| Interest bearing notes |
|
|
|
|
|
|
| Interbank securities |
|
|
|
|
|
|
| Negotiable debt securities |
37,051 |
9,424 |
233 |
30 |
|
46,738 |
| Bonds |
|
|
650 |
587 |
2 |
1,239 |
| Other debt securities |
|
|
|
|
|
|
| Total debt securities |
37,051 |
9,424 |
883 |
617 |
2 |
47,977 |
| Subordinated debt |
|
|
|
|
|
|
| Dated subordinated debt |
|
|
|
2,670 |
|
2,670 |
| Undated subordinated debt |
1 |
|
|
2,477 |
|
2,478 |
| Mutual security deposits |
|
|
|
|
|
|
| Participating securities and loans |
|
|
|
|
|
|
| Total subordinated debt |
1 |
|
|
5,147 |
|
5,148 |
3.3.2 FINANCIAL
GUARANTEES AT RISK GIVEN BY EXPECTED MATURITY
The amounts presented correspond to the expected amount of the call of financial
guarantees
at risk, i.e. guarantees that have been impaired or are on a watch-list.
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Financial guarantees given |
|
100 |
9 |
1 |
|
110 |
|
|
31.12.2017 |
| € million |
≤ 3 months |
>3 months to ≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Financial guarantees given |
|
106 |
15 |
|
|
121 |
The remaining contractual maturities of derivative instruments are shown in Note
3.2
"Market risk".
3.4 Hedge accounting
(See chapter "Risk factors - Balance sheet management")
3.4.1 FAIR VALUE
HEDGES
A fair value hedge modifies the risk caused by changes in the fair value of a fixed-rate
financial instrument as a result of changes in interest rates. Fair value hedges transform
fixed-rate assets or liabilities into floating-rate assets or liabilities.
The fair value hedges concern principally fixed-rate loans, securities, deposits
and
subordinated debt.
3.4.2 CASH FLOW
HEDGES
A cash flow hedge modifies the risk related to variability in cash flows arising
from
floating-rate financial instruments. Items hedged are principally floating-rate loans
and deposits
3.4.3 HEDGE OF
A NET INVESTMENT IN FOREIGN CURRENCY
A hedge of a net investment in foreign currency modifies the risk inherent in exchange
rate fluctuations connected with foreign currency investments in subsidiaries.
► Hedging derivative
instruments
|
|
31.12.2018 |
31.12.2017 |
|
|
Market value |
Notional |
Market value |
Notional |
| € million |
Positive |
Negative |
amount |
Positive |
Negative |
amount |
| Fair value hedges |
498 |
809 |
71,040 |
566 |
827 |
31,937 |
| Interest rate |
360 |
603 |
47,283 |
247 |
552 |
17,352 |
| Foreign exchange |
138 |
206 |
23,757 |
319 |
275 |
29,170 |
| Other |
|
|
|
|
|
|
| Cash flow hedges |
459 |
210 |
41,426 |
510 |
159 |
16,807 |
| Interest rate |
345 |
84 |
18,597 |
400 |
79 |
16,001 |
| Foreign exchange |
68 |
61 |
22,689 |
73 |
35 |
159 |
| Other |
46 |
65 |
140 |
37 |
45 |
647 |
| Hedges of net investments in foreign operations |
8 |
48 |
2,163 |
25 |
19 |
2,908 |
| Total hedging derivative instruments |
965 |
1,067 |
114,629 |
1,101 |
1,005 |
66,237 |
3.4.4 DERIVATIVE
INSTRUMENTS: ANALYSIS BY REMAINING MATURITY (NOTIONALS)
The breakdown of notionals values of derivative instruments is shown by remaining
contractual maturity.
|
|
31.12.2018 |
|
|
Exchange-traded transactions |
Over-the-counter
transactions |
| € million |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
≤ 1 year |
>1 year to ≤ 5 years |
>5 years |
| Interest rate instruments |
|
|
|
54,701 |
8,646 |
2,533 |
| Futures |
|
|
|
|
|
|
| FRAs |
|
|
|
|
|
|
| Interest rate swaps |
|
|
|
54,701 |
8,646 |
2,532 |
| Interest rate options |
|
|
|
|
|
|
| Caps - floors - collars |
|
|
|
|
|
1 |
| Other options |
|
|
|
|
|
|
| Currency |
|
|
|
8,911 |
139 |
|
| Currency futures |
|
|
|
8,911 |
139 |
|
| Currency options |
|
|
|
|
|
|
| Other instruments |
|
|
|
140 |
|
|
| Other |
|
|
|
140 |
|
|
| Subtotal |
|
|
|
63,752 |
8,785 |
2,533 |
| Forward currency transactions |
|
|
|
39,445 |
114 |
|
| Total notional of hedging derivatives |
|
|
|
103,197 |
8,899 |
2,533 |
|
|
31.12.2018 |
| € million |
Total notionnel |
| Interest rate instruments |
65,880 |
| Futures |
|
| FRAs |
|
| Interest rate swaps |
65,879 |
| Interest rate options |
|
| Caps - floors - collars |
1 |
| Other options |
|
| Currency |
9,050 |
| Currency futures |
9,050 |
| Currency options |
|
| Other instruments |
140 |
| Other |
140 |
| Subtotal |
75,070 |
| Forward currency transactions |
39,559 |
| Total notional of hedging derivatives |
114,629 |
Note "3.2 Market risk - Derivative instruments: Analysis by remaining maturity"
presents
the breakdown of market values of hedging derivatives by remaining contractual maturity.
3.4.5 FAIR VALUE
HEDGE
► Hedging derivative
instruments
|
|
31.12.2018 |
|
|
Carrying amount |
Changes in fair value during the
period (including end of hedges during the period) |
|
| € million |
Assets |
Liabilities |
|
Notional Amount |
| Fair value hedges |
|
|
|
|
| Exchange-traded |
|
|
(1) |
|
| Interest rate |
|
|
(1) |
|
| Futures |
|
|
(1) |
|
| Options |
|
|
|
|
| Foreign exchange |
|
|
|
|
| Futures |
|
|
|
|
| Options |
|
|
|
|
| Other |
|
|
|
|
| Over-the-counter markets |
454 |
788 |
103 |
65,980 |
| Interest rate |
316 |
582 |
63 |
42,223 |
| Futures |
316 |
582 |
63 |
42,222 |
| Options |
|
|
|
1 |
| Foreign exchange |
138 |
206 |
40 |
23,757 |
| Futures |
138 |
206 |
40 |
23,757 |
| Options |
|
|
|
|
| Other |
|
|
|
|
| Total Fair value microhedging |
454 |
788 |
102 |
65,980 |
| Fair value hedges of the interest rate exposure of a
portfolio of financial instruments |
44 |
21 |
(7) |
5,060 |
| Total fair value hedges |
498 |
809 |
95 |
71,040 |
Variations in the fair value of hedging derivatives are entered under "Net gains
(losses)
on financial instruments at fair value through profit and loss" on the income statement.
► Hedged items
|
|
31.12.2018 |
|
|
|
Present hedges |
Ended hedges |
Fair value hedge |
| € million |
Carrying amount |
of which accumulated fair value
hedge adjustments |
Accumulated fair value hedge adjustments
to be adjusted for hedging remaining to be
amortised
|
adjustments during the period (including
termination of hedges during the period) |
| Debt instruments at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
9,845 |
48 |
|
(48) |
| Interest rate |
9,795 |
48 |
|
(48) |
| Foreign exchange |
50 |
|
|
|
| Other |
|
|
|
|
| Debt instruments at amortised cost |
39,404 |
114 |
|
68 |
| Interest rate |
23,562 |
110 |
|
(2) |
| Foreign exchange |
15,843 |
4 |
|
70 |
| Other |
|
|
|
|
| Total fair value hedges on assets items |
49,249 |
162 |
|
20 |
| Debt instruments at amortised cost |
15,480 |
169 |
|
122 |
| Interest rate |
8,320 |
70 |
|
(21) |
| Foreign exchange |
7,160 |
99 |
|
143 |
| Other |
|
|
|
|
| Total fair value hedges on liabilities items |
15,480 |
169 |
|
122 |
The fair value of hedged portions of financial instruments microhedged in fair
value
is recognised under the balance sheet item to which it belongs. The variations in
fair value of the hedged portions of the financial instruments micro-hedged by fair
value are recognised under "Net gains (losses) on financial instruments at fair value
through profit and loss" on the income statement.
► Macro-hedging
|
|
31.12.2018 |
| € million |
Carrying amount |
Accumulated fair value hedge adjustments
to be adjusted for hedging remaining to be
adjusted, on ended hedges
|
| Debt instruments at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
|
|
| Debt instruments at amortised cost |
|
2 |
| Total - Assets |
|
2 |
| Debt instruments at amortised cost |
5,252 |
6 |
| Total - Liabilities |
5,252 |
6 |
| Total hedge of the fair value of the interest rate risk
exposure of a financial instruments
portfolio
|
5,252 |
8 |
The fair value hedged portions of financial instruments microhedged in fair value
is recognised under "Revaluation adjustment on interest rate hedged portfolios" on
the balance sheet. The changes in fair value of the hedged portions of the financial
instruments macro-hedged at fair value are recognised under "Net gains (losses) on
financial instruments at fair value through profit and loss" on the income statement.
► Gains (losses)
from hedge accounting
|
|
31.12.2018 |
|
|
Net Income (Total
Gains (losses) from hedge accounting) |
| € million |
Change in fair value of hedging
derivatives (including termination of hedges) |
Change in fair value of hedged
items (including termination of hedges) |
Hedge ineffectiveness portion |
| Interest rate |
55 |
(54) |
1 |
| Foreign exchange |
40 |
(40) |
|
| Other |
|
|
|
| Total |
95 |
(94) |
1 |
3.4.6 CASH FLOW
HEDGES AND HEDGES OF NET INVESTMENTS IN FOREIGN OPERATION (NIH)
► Hedging derivative
instruments
|
|
31.12.2018 |
|
|
Carrying amount |
Changes in fair value during the
period (including termination of hedges during the
period)
|
|
| € million |
Assets |
Liabilities |
|
Notional amount |
| Exchange-traded |
|
|
|
|
| Interest rate |
|
|
|
|
| Futures |
|
|
|
|
| Options |
|
|
|
|
| Foreign exchange |
|
|
|
|
| Futures |
|
|
|
|
| Options |
|
|
|
|
| Other |
|
|
|
|
| Over-the-counter markets |
90 |
70 |
(109) |
20,033 |
| Interest rate |
1 |
|
(109) |
3,535 |
| Futures |
1 |
|
(109) |
3,535 |
| Options |
|
|
|
|
| Foreign exchange |
43 |
4 |
|
16,358 |
| Futures |
43 |
4 |
|
16,358 |
| Options |
|
|
|
|
| Other |
46 |
65 |
|
140 |
| Total Cash flow micro-hedging |
90 |
70 |
(109) |
20,033 |
| Cash flow hedges of the interest rate exposure of a portfolio
of financial instruments |
344 |
84 |
(1) |
15,062 |
| Cash flow hedges of the foreign exchange exposure of
a portfolio of financial instruments |
25 |
56 |
|
6,332 |
| Total Cash flow macro-hedging |
369 |
140 |
(1) |
21,394 |
| Total Cash flow hedges |
459 |
210 |
(110) |
41,426 |
| Hedges of net investments in foreign operations |
8 |
48 |
(16) |
2,163 |
The variations in fair value of the hedging derivatives are entered under "Gains
or
losses recognised directly in equity" with the exception of the ineffective portion
of the hedge which is recognised under "Net gains or losses on financial instruments
at fair value through profit or loss" on the income statement.
► Gains (losses)
from hedge accounting
|
|
31.12.2018 |
|
|
Other comprehensive
income on items that may be reclassified to profit and loss |
Net income (Hedge accounting income
or loss) |
| € million |
Effective portion of the hedge
recognised during the period |
Amount reclassified from other
comprehensive income into profit or loss during the
period
|
Hedge ineffectiveness portion |
| Interest rate |
(110) |
|
|
| Foreign exchange |
|
|
|
| Other |
|
|
|
| Total Cash flow hedges |
(110) |
|
|
| Hedges of net investments in foreign operations |
(17) |
1 |
|
| Total cash flow hedges and hedges of net investments
in foreign operations |
(127) |
1 |
|
NOTE 4: NOTES
ON NET INCOME AND OTHER COMPREHENSIVE INCOME
4.1 Interest income
and expenses
| € million |
31.12.2018 |
| On financial assets at amortised cost |
5,717 |
| Interbank transactions |
1,024 |
| Customer transactions |
4,368 |
| Debt securities |
325 |
| On financial assets recognised at fair value through
other comprehensive income |
202 |
| Interbank transactions |
|
| Customer transactions |
|
| Debt securities |
202 |
| Accrued interest receivable on hedging instruments |
294 |
| Other interest income |
2 |
| Interest and similar income (1) |
6,215 |
| On financial liabilities at amortised cost |
(3,514) |
| Interbank transactions |
(1,277) |
| Customer transactions |
(1,357) |
| Debt securities |
(707) |
| Subordinated debt |
(173) |
| Accrued interest receivable on hedging instruments |
(228) |
| Other interest expenses |
(16) |
| Interest and similar expenses |
(3,758) |
(1)
including €62 million on impaired receivables (Bucket 3) at 31 December 2018.
| € million |
31.12.2017 |
| Interbank transactions |
1,053 |
| Customer transactions |
3,673 |
| Accrued interest receivable on available-for-sale financial
assets |
381 |
| Accrued interest receivable on held-to-maturity financial
assets |
|
| Accrued interest receivable on hedging instruments |
450 |
| Other interest income |
13 |
| Interests and similar income (1) |
5,570 |
| Interbank transactions |
(1,131) |
| Customer transactions |
(942) |
| Debt securities |
(440) |
| Subordinated debt |
(159) |
| Accrued interest receivable on hedging instruments |
(257) |
| Other interest expense |
(34) |
| Interests and similar expenses |
(2,963) |
(1)
Of which €98 million on receivables impaired individually at 31 December 2017.
4.2 Net fees and
commissions
|
|
31.12.2018 |
31.12.2017 |
| € million |
Income |
Expense |
Net |
Income |
Expense |
Net |
| Interbank transactions |
38 |
(19) |
19 |
20 |
(19) |
1 |
| Customer transactions |
650 |
(141) |
509 |
600 |
(113) |
487 |
| Securities transactions |
32 |
(76) |
(44) |
39 |
(66) |
(27) |
| Foreign exchange transactions |
7 |
(42) |
(35) |
9 |
(37) |
(28) |
| Derivative instruments and other off-balance sheet items |
212 |
(136) |
76 |
291 |
(115) |
176 |
| Payment instruments and other banking and financial services |
374 |
(106) |
268 |
321 |
(115) |
206 |
| Mutual funds management, fiduciary and similar operations |
268 |
(104) |
164 |
277 |
(19) |
258 |
| Net fees and commissions |
1,581 |
(624) |
957 |
1,557 |
(484) |
1,073 |
4.3 Net gains
(losses) on financial instruments at fair value through profit or loss
| € million |
31.12.2018 |
| Dividends received |
313 |
| Unrealised or realised gains (losses) on assets/liabilities
held for trading |
166 |
| Unrealised or realised gains (losses) on equity instruments
at fair value through
profit or loss
|
66 |
| Unrealised or realised gains (losses) on debt instruments
at fair value through profit
or loss
|
6 |
| Net gains (losses) on assets backing unit-linked contracts |
|
| Unrealised or realised gains (losses) on assets/liabilities
designated at fair value
through profit or loss
|
(244) |
| Net gains (losses) on Foreign exchange transactions and
similar financial instruments
(excluding gains or losses on hedges of net investments in foreign operations)
|
1,466 |
| Gains (losses) from hedge accounting |
1 |
| Net gains (losses) on financial instruments at fair value
through profit or loss |
1,774 |
| € million |
31.12.2017 |
| Dividends received |
325 |
| Unrealised or realised gains (losses) on assets/liabilities
held for trading |
1,313 |
| Unrealised or realised gains (losses) on assets/liabilities
designated at fair value
through profit or loss
|
(890) |
| Net gains (losses) on Foreign exchange transactions and
similar financial instruments
(excluding gains or losses on hedges of net investments in foreign operations)
|
315 |
| Gains (losses) from hedge accounting |
1 |
| Net gains losses) on financial instruments at fair value
through profit or loss |
1,064 |
The issuer spread impact was an expense of €222 million in Net Banking Income at
31
December 2017 versus an expense of €161 million at 30 June 2017 (including the termination
payments in 2017).
Under IFRS 9, the Crédit Agricole CIB issuer spread is classified with effect from
1 January 2018 as Equity under Other comprehensive income on items that will not be
reclassified subsequently to profit or loss.
Analysis of net gains (losses) from hedge accounting:
|
|
31.12.2018 |
31.12.2017 |
| € million |
Profits |
Pertes |
Net |
Profits |
Pertes |
Net |
| Fair value hedges |
760 |
(759) |
1 |
647 |
(646) |
1 |
| Changes in fair value of hedged items attributable to
hedged risks |
329 |
(431) |
(101) |
440 |
(207) |
233 |
| Changes in fair value of hedging derivatives (including
termination of hedges) |
431 |
(328) |
103 |
207 |
(439) |
(232) |
| Cash flow hedges Changes in fair value of hedging derivatives
- ineffective portion |
|
|
|
|
|
|
| Hedges of net investments in foreign operations |
|
|
|
|
|
|
| Changes in fair value of hedging derivatives - ineffective
portion |
|
|
|
|
|
|
| Fair value hedges of the interest rate exposure of a
portfolio of financial instruments |
18 |
(18) |
|
31 |
(31) |
|
| Changes in fair value of hedged items |
12 |
(5) |
7 |
29 |
(2) |
27 |
| Changes in fair value of hedging derivatives |
6 |
(13) |
(7) |
2 |
(29) |
(27) |
| Cash flow hedges of the interest rate exposure of a portfolio
of financial instruments |
|
|
|
|
|
|
| Changes in fair value of hedging instrument - ineffective
portion |
|
|
|
|
|
|
| Total gains (losses) from hedge accounting |
778 |
(777) |
|
678 |
(677) |
1 |
The breakdown of gains (losses) from hedge accounting by type of relationship (fair
value hedges, cash flow hedges etc.) is presented in note 3.4 "Hedge accounting".
4.4 Net gains
(losses) on financial instruments at fair value through equity capital
| € million |
31.12.2018 |
| Net gains (losses) on debt instruments at fair value
through other comprehensive income
that may be reclassified subsequently to profit or loss (1) |
|
| Remuneration of equity instruments measured at fair value
through other comprehensive
income that will not be reclassified subsequently to profit or loss (dividends)
|
92 |
| Of which dividends on equity instruments derecognised
during the period |
|
| Net gains (losses) on financial instruments at fair value
through other comprehensive
income
|
92 |
(1)
Excluding realised gains or losses from impaired debt instruments (Bucket 3) mentioned
in Note 4.9 "Cost of risk".
► Net gains (losses)
on available-for-sale financial assets at 31 December 2017
| € million |
31.12.2017 |
| Dividends received |
144 |
| Realised gains (losses) on available-for-sale financial
assets (1) |
126 |
| Permanent impairment losses on equity investments |
(2) |
| Gains (losses) on disposal of held-to-maturity financial
assets and on loans and receivables |
(13) |
| Net gains (losses) on available-for-sale financial assets |
255 |
(1)
Excluding realised gains or losses on permanently impaired fixed-income securities
recognised as available-for-sale financial assets mentioned in Note 4.9 "Cost of risk".
4.5 Net gains
(losses) from the derecognition of financial assets at amortised cost
| € million |
31.12.2018 |
| Debt securities |
3 |
| Loans and receivables due from credit institutions |
|
| Loans and receivables due from customers |
|
| Gains arising from the derecognition of financial assets
at amortised cost |
3 |
| Debt securities |
|
| Loans and receivables due from credit institutions |
|
| Loans and receivables due from customers |
(4) |
| Losses arising from the derecognition of financial assets
at amortised cost |
(4) |
| Net gains (losses) arising from the derecognition of
financial assets at amortised
cost (1) |
(1) |
(1)
Excluding gains or losses from the derecognition of impaired debt instruments (Bucket
3) mentioned in note 4.9 "Cost of risk".
4.6 Net income
(expenses) on other activities
| € million |
31.12.2018 |
31.12.2017 |
| Other net income from insurance activities |
4 |
(1) |
| Change in insurance technical reserves |
(4) |
1 |
| Other net income (expense) |
(3) |
|
| Income (expense) related to other activities |
(3) |
|
4.7 Operating
expenses
| € million |
31.12.2018 |
31.12.2017 |
| Employee expenses |
(2,069) |
(1,939) |
| Taxes other than on income or payroll-related and regulatory
contributions (1) |
(208) |
(244) |
| External services and other operating expenses |
(958) |
(911) |
| Operating expenses |
(3,235) |
(3,094) |
(1)
Of which €157 million entered under the Single Resolution Fund (SRF) at 31 December
2018 compared with €140 million at 31 December 2017.
FEES PAID TO STATUTORY
AUDITORS
Operating expenses include the fees paid to Crédit Agricole CIB Statutory Auditors.
The breakdown of the fees recognised in 2018 by audit firm and by type of engagement
is provided below:
♦ College of statutory
auditors of credit agricole cib:
|
|
Ernst & Young |
Pricewaterhouse Coopers |
Total |
| € thousands (excluding VAT) |
2018 |
2017 |
2018 |
2017 |
2018 |
| Independant audit, certification, review of parent company
and consolidated financial
statements
|
5,666 |
6,220 |
5,743 |
5,993 |
11,409 |
| Issuer |
3,423 |
3,663 |
2,791 |
3,031 |
6,214 |
| Fully consolidated subsidiaries |
2,243 |
2,557 |
2,952 |
2,962 |
5,195 |
| Non audit services |
946 |
1,385 |
1,772 |
1,239 |
2,718 |
| Issuer |
517 |
796 |
1,270 |
1,001 |
1,787 |
| Fully consolidated subsidiaries |
429 |
589 |
502 |
238 |
931 |
| Total |
6,612 |
7,605 |
7,515 |
7,232 |
14,127 |
The total amount of fees of Ernst & Young, Statutory Auditor of Crédit Agricole
CIB,
on the consolidated income statement for the financial year is €2.4 million, including
€2 million for certifying the accounts of Crédit Agricole CIB and its subsidiaries,
and €0.4 million for non audit services (comfort letters, agreed procedures). The
total amount of fees of PricewaterhouseCoopers Audit, Statutory Auditor of Crédit
Agricole CIB, on the consolidated income statement for the financial year is €2.3
million, including €2.1 million for certifying the accounts of Crédit Agricole CIB
and its subsidiaries, and €0.2 million for non audit services (comfort letters, agreed
procedures, attestations, tax declarations compliance review, services in relation
to environmental and social reporting, consultations, etc.).
♦ Other statutory
auditors working for companies of the crédit agricole cib group,
fully consolidated
|
|
Mazars |
KPMG |
Deloitte |
| € thousands (excluding VAT) |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
| Independant audit, certification, review of parent company
and consolidated financial
statements
|
12 |
12 |
|
75 |
|
41 |
| Non audit services |
|
|
|
|
|
|
| Total |
12 |
12 |
|
75 |
|
41 |
|
|
Other |
Total |
| € thousands (excluding VAT) |
2018 |
2017 |
2018 |
| Independant audit, certification, review of parent company
and consolidated financial
statements
|
184 |
213 |
196 |
| Non audit services |
5 |
19 |
5 |
| Total |
189 |
232 |
201 |
4.8 Depreciation,
amortisation and impairment of property, plant & equipment and intangible
assets
| € million |
31.12.2018 |
31.12.2017 |
| Depreciation charges and amortisation |
(86) |
(91) |
| Property, plant and equipment |
(45) |
(46) |
| Intangible assets |
(41) |
(45) |
| Impairment losses (reversals) |
|
|
| Property, plant and equipment |
|
|
| Intangible assets |
|
|
| Depreciation, amortisation and impairment of property,
plant & equipment and intangible
assets
|
(86) |
(91) |
4.9 Cost of risk
| € million |
31.12.2018 |
| Charges net of reversals to impairments on performing
assets (Bucket 1 or Bucket 2) |
93 |
| Bucket 1: Loss allowance measured at an amount equal
to 12-month expected credit loss |
(56) |
| Debt instruments at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
2 |
| Debt instruments at amortised cost |
(30) |
| Commitments by signature |
(28) |
| Bucket 2: Loss allowance measured at an amount equal
to lifetime expected credit loss |
149 |
| Debt instruments at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
|
| Debt instruments at amortised cost |
84 |
| Commitments by signature |
65 |
| Charges net of reversals to impairments on credit-impaired
assets (Bucket 3) |
(39) |
| Bucket 3: Credit-impaired assets |
(39) |
| Debt instruments at fair value through other comprehensive
income that may be reclassified
to profit or loss
|
|
| Debt instruments at amortised cost |
(122) |
| Commitments by signature |
83 |
| Other assets |
(9) |
| Risks and expenses |
5 |
| Charges net of reversals to impairment losses and provisions |
50 |
| Realised gains (losses) on disposal of impaired debt
instruments at fair value through
other comprehensive income that may be reclassified to profit and loss
|
|
| Realised gains (losses) on impaired debt instruments
at amortised cost |
|
| Losses on non-impaired loans and bad debt |
(52) |
| Recoveries on loans and receivables written off |
55 |
| recognised at amortised cost |
55 |
| recognised in other comprehensive income that may be
reclassified to profit or loss |
|
| Discounts on restructured loans |
|
| Losses on commitments by signature |
(4) |
| Other losses |
(9) |
| Other gains |
15 |
| Cost of risk |
55 |
| € million |
31.12.2017 |
| Charge to provisions and impairment losses |
(902) |
| Loans and receivables |
(548) |
| Other assets |
(14) |
| Financing commitments |
(200) |
| Risks and expenses |
(140) |
| Reversal of provisions and impairment losses |
581 |
| Fixed income available-for-sale financial assets |
33 |
| Loans and receivables |
453 |
| Other assets |
14 |
| Financing commitments |
13 |
| Risks and expenses |
68 |
| Net charge to reversal of impairment losses and provisions |
(321) |
| Realised gains (losses) on impaired fixed income available-for-sale
financial assets |
(1) |
| Bad debts written off, not impaired |
(52) |
| Recoveries on bad debts written off |
54 |
| Other losses |
(10) |
| Other gains |
|
| Cost of risk |
(330) |
4.10 Net gains
(losses) on other assets
| € million |
31.12.2018 |
31.12.2017 |
| Property, plant & equipment and intangible assets
used in operations |
|
7 |
| Gains on disposals |
|
7 |
| Losses on disposals |
|
|
| Consolidated equity investments |
|
11 |
| Gains on disposals |
|
17 |
| Losses on disposals |
|
(6) |
| Net income (expense) on combinations |
|
|
| Net gains (losses) on other assets |
|
18 |
4.11 Income tax
charge
INCOME TAX CHARGE
| € million |
31.12.2018 |
31.12.2017 |
| Current tax charge |
(520) |
(549) |
| Deferred tax charge |
(5) |
(65) |
| Total tax charge |
(525) |
(614) |
RECONCILIATION
OF THEORETICAL TAX RATE AND EFFECTIVE TAX RATE
► At 31 December
2018
| € million |
Base |
Tax rate(1) |
Tax |
| Pre-tax income, goodwill impairment, discontinued operations
and share of net income
of equity-accounted entities
|
2,010 |
34.43% |
(692) |
| Impact of permanent differences |
|
(2.30)% |
46 |
| Impact of different tax rates on foreign subsidiaries |
|
(4.61)% |
93 |
| Impact of losses for the year, utilisation of tax loss
carryforwards |
|
1.20% |
(24) |
| Impact of reduced tax rate |
|
(0.79)% |
16 |
| Impact of tax rate change |
|
|
|
| Impact of other items |
|
(1.67)% |
36 |
| Effective tax rate and tax charge |
|
26.12% |
(525) |
(1)
The theoretical tax rate is the standard tax rate (including the additional social
contribution) on taxable profits in France at 31 December 2018.
► At 31 December
2017
| € million |
Base |
Tax rate(1) |
Tax |
| Pre-tax income, goodwill impairment, discontinued operations
and share of net income
of equity-accounted entities
|
1,502 |
34.43% |
(517) |
| Impact of permanent differences |
|
4.00% |
(61) |
| Impact of different tax rates on foreign subsidiaries |
|
(5.33)% |
80 |
| Impact of losses for the year, utilisation of tax loss
carryforwards |
|
2.86% |
(43) |
| Impact of reduced tax rate |
|
5.13% |
(77) |
| Impact of other items |
|
(0.03)% |
4 |
| Effective tax rate and tax charge |
|
40.79% |
(614) |
(1)
The theoretical tax rate is the standard tax rate (including the additional social
contribution) on taxable profits in France at 31 December 2017.
4.12 Changes in
other comprehensive income
Detail of incomes and expenses recorded during the period is introduced below:
► Detail of other
comprehensive income
| € million |
31.12.2018 |
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss of income tax
|
|
| Gains and losses on translation adjustments |
148 |
| Revaluation adjustment of the period |
|
| Reclassified to profit or loss |
|
| Other changes |
148 |
| Other comprehensive income on debt instruments that may
be reclassified to profit
or loss
|
(41) |
| Revaluation adjustment of the period |
(36) |
| Reclassified to profit or loss |
(1) |
| Other changes |
(4) |
| Gains and losses on hedging derivative instruments |
(109) |
| Revaluation adjustment of the period |
(111) |
| Reclassified to profit or loss |
|
| Other changes |
2 |
| Reclassification of net gains (losses) of designated
financial assets applying the
overlay approach
|
|
| Revaluation adjustment of the period |
|
| Reclassified to profit or loss |
|
| Other changes |
|
| Pre-tax other comprehensive income on items that may
be reclassified to profit or
loss on equity-accounted entities
|
1 |
| Income tax related to items that may be reclassified
to profit or loss excluding equity-accounted
entities
|
47 |
| Income tax related to items that may be reclassified
to profit or loss on equity-accounted
entities
|
|
| Other comprehensive income on items that may be reclassified
to profit or loss from
discontinued operations
|
|
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss of income tax
|
46 |
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss net of income tax
|
|
| Actuarial gains and losses on post-employment benefits |
51 |
| Other comprehensive income on financial liabilities attributable
to changes in own
credit risk
|
368 |
| Revaluation adjustment of the period |
350 |
| Reclassified to reserves |
18 |
| Other changes |
|
| Other comprehensive income on equity instruments that
will not be reclassified to
profit or loss
|
264 |
| Revaluation adjustment of the period |
170 |
| Reclassified to reserves |
71 |
| Other changes |
23 |
| Other comprehensive income on items that will not be
reclassified to profit or loss
on equity-accounted entities
|
|
| Income tax related to items that will not be reclassified
excluding equity-accounted
entities
|
(262) |
| Income tax related to items that will not be reclassified
on equity-accounted entities |
|
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss net of income tax
|
421 |
| Other comprehensive income net of income tax |
467 |
| Of which Group share |
472 |
| Of which non-controlling interests |
(4) |
| € million |
31.12.2017 |
| Other comprehensive income on items that may be reclassified
subsequently to profit
and loss
|
|
| Gains and losses on translation adjustments |
(548) |
| Revaluation adjustment of the period |
|
| Reclassified to profit or loss |
|
| Other variations |
(548) |
| Gains and losses on available-for-sale financial assets |
(298) |
| Revaluation adjustment of the period |
(166) |
| Reclassified to profit or loss |
(115) |
| Other variations |
(17) |
| Gains and losses on hedging derivative instruments |
(224) |
| Revaluation adjustment of the period |
(223) |
| Reclassified to profit or loss |
|
| Other variations |
(1) |
| Pre-tax other comprehensive income on items that may
be reclassified to profit and
loss on equity-accounted entities
|
(357) |
| Income tax related to items that may be reclassified
to profit and loss excluding
equity-accounted entities
|
124 |
| Income tax related to items that may be reclassified
to profit and loss on equity-accounted
entities
|
|
| Net other comprehensive income on Items that may be reclassified
to profit and loss
on equity-accounted entities on discontinued operations
|
|
| Other comprehensive income on items that may be reclassified
subsequently to profit
and loss, net of income tax
|
(1,303) |
| Other comprehensive income on items that will not be
reclassified subsequently to
profit and loss
|
|
| Actuarial gains and losses on post-employment benefits |
67 |
| Other comprehensive income on items that will not be
reclassified to profit and loss
on equity-accounted entities
|
|
| Income tax related to items that will not be reclassified
excluding equity-accounted
entities
|
(38) |
| Income tax related to items that will not be reclassified
on equity-accounted entities |
|
| Net other comprehensive income on Items that will not
be reclassified to profit and
loss on equity-accounted entities on discontinued operations
|
|
| Other comprehensive income on items that will not be
reclassified subsequently to
profit and loss, net of income tax
|
29 |
| Other comprehensive income net of income tax |
(1,274) |
| Of which Group share |
(1,268) |
| Of which non-controlling interests |
(6) |
BREAKDOWN OF TAX
IMPACTS RELATED TO OTHER COMPREHENSIVE INCOME
|
|
31.12.2017 |
01.01.2018 |
| € million |
Gross |
Income tax charges |
Net of income tax |
Net of income tax of which Group
Share |
Gross |
Income tax charges |
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss
|
|
|
|
|
|
|
| Gains and losses on translation adjustments |
204 |
|
204 |
204 |
204 |
|
| Gains and losses on available-for-sale financial assets |
50 |
(35) |
15 |
15 |
|
|
| Gains and losses on debt instruments at fair value through
other comprehensive income
that may be reclassified to profit or loss
|
|
|
|
|
70 |
(19) |
| Gains and losses on hedging derivative instruments |
358 |
(120) |
238 |
235 |
358 |
(120) |
| Other comprehensive income on items that may be reclassified
to profit or loss excluding
equity-accounted entities
|
612 |
(155) |
457 |
454 |
632 |
(139) |
| Other comprehensive income on items that may be reclassified
to profit or loss on
equity-accounted entities
|
|
|
|
|
|
|
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss
|
612 |
(155) |
457 |
454 |
632 |
(139) |
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss
|
|
|
|
|
|
|
| Actuarial gains and losses on post-employment benefits |
(385) |
81 |
(304) |
(305) |
(385) |
81 |
| Other comprehensive income on financial liabilities attributable
to changes in own
credit risk
|
|
|
|
|
(505) |
174 |
| Other comprehensive income on equity instruments that
will not be reclassified to
profit or loss
|
|
|
|
|
(207) |
55 |
| Other comprehensive income on items that will not be
reclassified to profit or loss
excluding equity-accounted entities
|
(385) |
81 |
(304) |
(305) |
(1,097) |
310 |
| Other comprehensive income on items that will not be
reclassified to profit or loss
on equity-accounted entities
|
|
|
|
|
|
|
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss
|
(385) |
81 |
(304) |
(305) |
(1,097) |
310 |
| Other comprehensive income |
227 |
(74) |
153 |
149 |
(465) |
171 |
|
|
01.01.2018 |
Changes |
| € million |
Net of income tax |
Net of income tax of which Group
Share |
Gross |
Income tax charges |
Net of income tax |
Net of income tax of which Group
Share |
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss
|
|
|
|
|
|
|
| Gains and losses on translation adjustments |
204 |
204 |
148 |
|
148 |
148 |
| Gains and losses on available-for-sale financial assets |
|
|
|
|
|
|
| Gains and losses on debt instruments at fair value through
other comprehensive income
that may be reclassified to profit or loss
|
51 |
51 |
(40) |
10 |
(30) |
(30) |
| Gains and losses on hedging derivative instruments |
238 |
235 |
(109) |
37 |
(72) |
(71) |
| Other comprehensive income on items that may be reclassified
to profit or loss excluding
equity-accounted entities
|
493 |
490 |
(1) |
47 |
46 |
47 |
| Other comprehensive income on items that may be reclassified
to profit or loss on
equity-accounted entities
|
|
|
(1) |
|
(1) |
(1) |
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss
|
493 |
490 |
(2) |
47 |
45 |
46 |
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss
|
|
|
|
|
|
|
| Actuarial gains and losses on post-employment benefits |
(304) |
(305) |
52 |
(16) |
36 |
39 |
| Other comprehensive income on financial liabilities attributable
to changes in own
credit risk
|
(331) |
(331) |
368 |
(133) |
235 |
235 |
| Other comprehensive income on equity instruments that
will not be reclassified to
profit or loss
|
(152) |
(152) |
264 |
(113) |
151 |
152 |
| Other comprehensive income on items that will not be
reclassified to profit or loss
excluding equity-accounted entities
|
(787) |
(788) |
684 |
(262) |
422 |
426 |
| Other comprehensive income on items that will not be
reclassified to profit or loss
on equity-accounted entities
|
|
|
|
|
|
|
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss
|
(787) |
(788) |
684 |
(262) |
422 |
426 |
| Other comprehensive income |
(294) |
(298) |
682 |
(215) |
467 |
472 |
|
|
31.12.2018 |
| € million |
Gross |
Income tax charges |
Net of income tax |
Net of income tax of which Group
Share |
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss
|
|
|
|
|
| Gains and losses on translation adjustments |
352 |
|
352 |
352 |
| Gains and losses on available-for-sale financial assets |
|
|
|
|
| Gains and losses on debt instruments at fair value through
other comprehensive income
that may be reclassified to profit or loss
|
30 |
(9) |
21 |
21 |
| Gains and losses on hedging derivative instruments |
249 |
(83) |
166 |
164 |
| Other comprehensive income on items that may be reclassified
to profit or loss excluding
equity-accounted entities
|
631 |
(92) |
539 |
537 |
| Other comprehensive income on items that may be reclassified
to profit or loss on
equity-accounted entities
|
(1) |
|
(1) |
(1) |
| Other comprehensive income on items that may be reclassified
subsequently to profit
or loss
|
630 |
(92) |
538 |
536 |
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss
|
|
|
|
|
| Actuarial gains and losses on post-employment benefits |
(333) |
65 |
(268) |
(266) |
| Other comprehensive income on financial liabilities attributable
to changes in own
credit risk
|
(137) |
41 |
(96) |
(96) |
| Other comprehensive income on equity instruments that
will not be reclassified to
profit or loss
|
57 |
(58) |
(1) |
|
| Other comprehensive income on items that will not be
reclassified to profit or loss
excluding equity-accounted entities
|
(413) |
48 |
(365) |
(362) |
| Other comprehensive income on items that will not be
reclassified to profit or loss
on equity-accounted entities
|
|
|
|
|
| Other comprehensive income on items that will not be
reclassified subsequently to
profit or loss
|
(413) |
48 |
(365) |
(362) |
| Other comprehensive income |
217 |
(44) |
173 |
174 |
NOTE 5: SEGMENT
REPORTING
Definition of
business
The naming of Crédit Agricole CIB's business lines corresponds to the Definitions
applied within the Crédit Agricole S.A. Group.
PRESENTATION OF
BUSINESS LINES
Operations are broken down into four business lines.
| ― |
the financing activities include the commercial banking business
lines in France and
abroad as well as the structured finance activities: project finance, aeronautics
financing, shipping financing, acquisitions finance, real estate finance;
|
| ― |
capital markets and investment banking covers capital market
activities (treasury,
foreign exchange, interest-rate derivatives and debt markets) and investment banking
activities (mergers and acquisitions and primary equity advisory);
|
These two business lines make up nearly 100% of the Corporate and Investment banking
business line of Crédit Agricole S.A.. Note that the discontinued operations are now
included in the Capital Markets and Investment Banking and Financing Activities businesses,
and that the SFS activity (1) (Structured and Financial Solutions) has
been transferred from Financing Activities
to Capital Markets and Investment banking.
| ― |
Crédit Agricole CIB is also active in wealth management through
its locations in France,
Belgium, Switzerland, Luxembourg, Monaco, Spain, Brazil and more recently in Asia
with the acquisition in 2017 of CIC wealth management activities in Singapore and
Hong Kong;
|
| ― |
The Corporate Centre business line encompasses the impacts linked
to the issuer spread.
|
5.1 Operating
segment information
Transactions between operating segments are effected at arm's length.
Segment assets are determined based on balance sheet elements for each operating
segment.
|
|
31.12.2018 |
| € million |
Financing activities |
Capital markets and investment
banking |
Total CIB |
Wealth management |
Non- business activities |
Crédit Agricole CIB |
| Revenues |
2,510 |
1,944 |
4,454 |
822 |
|
5,276 |
| Operating expenses |
(994) |
(1,616) |
(2,610) |
(711) |
|
(3,321) |
| Gross operating income |
1,516 |
328 |
1,844 |
111 |
|
1,955 |
| Cost of risk |
82 |
(22) |
60 |
(5) |
|
55 |
| Share of net income of equity-accounted entities |
|
|
|
|
|
|
| Net gains (losses) on other assets |
|
|
|
|
|
|
| Change in value of goodwill |
|
|
|
|
|
|
| Pre-tax income |
1,598 |
306 |
1,904 |
106 |
|
2,010 |
| Income tax charge |
(421) |
(79) |
(500) |
(29) |
4 |
(525) |
| Net income from discontinued operations |
|
|
|
|
|
|
| Net income |
1,177 |
227 |
1,404 |
77 |
4 |
1,485 |
| Non-controlling interests |
(2) |
|
(2) |
8 |
|
6 |
| Net income group share |
1,179 |
227 |
1,406 |
69 |
4 |
1,479 |
Under IFRS 9, the Crédit Agricole CIB issuer spread is classified with effect from
1 January 2018 as equity under "Other comprehensive income on items that will not
be reclassified to profit or loss".
|
|
31.12.2018 |
| € million |
Financing activities |
Capital markets and investment
banking |
Total CIB |
Wealth management |
Non- business activities |
Crédit Agricole CIB |
| Segment assets |
|
|
|
|
|
|
| of which investments in equity-accounted entities |
|
|
|
|
|
|
| of which goodwill |
|
|
484 |
541 |
|
1,025 |
| Total assets |
|
|
493,734 |
17,968 |
|
511,702 |
|
|
31.12.2017 |
| € million |
Financing activities |
Capital markets and investment
banking |
Total CIB |
Wealth management |
Non- business activities |
Crédit Agricole CIB |
| Revenues |
|
|
|
|
|
|
| Operating expenses |
(945) |
(1,615) |
(2,560) |
(625) |
|
(3,185) |
| Gross operating income |
1,307 |
587 |
1,894 |
140 |
(220) |
1,814 |
| Cost of risk |
(260) |
(59) |
(319) |
(11) |
|
(330) |
| Share of net income of equity-accounted entities |
277 |
|
277 |
|
|
277 |
| Net gains (losses) on other assets |
12 |
|
12 |
6 |
|
18 |
| Change in value of goodwill |
|
|
|
|
|
|
| Pre-tax income |
1,336 |
528 |
1,864 |
135 |
(220) |
1,779 |
| Income tax charge |
(506) |
(154) |
(660) |
(15) |
61 |
(614) |
| Net income from discontinued operations |
|
|
|
|
|
|
| Net income |
830 |
374 |
1,204 |
120 |
(159) |
1,165 |
| Non-controlling interests |
(1) |
(1) |
(2) |
11 |
|
9 |
| Net income group share |
831 |
375 |
1,206 |
109 |
(159) |
1,156 |
|
|
31.12.2017 |
| € million |
Financing activities |
Capital markets and investment
banking |
Total CIB |
Wealth management |
Non- business activities |
Crédit Agricole CIB |
| Segment assets |
|
|
|
|
|
|
| of which investments in equity-accounted entities |
|
|
277 |
|
|
277 |
| of which goodwill |
|
|
484 |
503 |
|
987 |
| Total assets |
|
|
458,845 |
29,741 |
|
488,586 |
5.2 Segment information:
geographical analysis
The geographical analysis of segment assets and results is based on the place where
operations are booked for accounting purposes.
|
|
31.12.2018 |
| € million |
Net income Group Share |
Of which Revenues |
Segment assets |
Of which goodwill |
| France (including overseas departments and territories) |
485 |
2,126 |
341,160 |
474 |
| Other European Union countries |
176 |
1,046 |
26,472 |
137 |
| Other European countries |
53 |
406 |
14,675 |
402 |
| North America |
447 |
806 |
55,933 |
|
| Central and South America |
20 |
47 |
986 |
2 |
| Africa and Middle East |
33 |
63 |
2,801 |
|
| Asia-Pacific (ex. Japan) |
164 |
566 |
25,189 |
10 |
| Japan |
101 |
216 |
44,486 |
|
| Total |
1,479 |
5,276 |
511,702 |
1,025 |
|
|
31.12.2017 |
| € million |
Net income Group Share |
Of which Revenues |
Segment assets |
Of which goodwill |
| France (including overseas departments and territories) |
255 |
1,786 |
338,946 |
474 |
| Other European Union countries |
29 |
1,000 |
23,288 |
115 |
| Other European countries |
72 |
454 |
13,315 |
386 |
| North America |
324 |
891 |
50,868 |
|
| Central and South America |
8 |
63 |
987 |
2 |
| Africa and Middle East |
219 |
76 |
2,376 |
|
| Asia-Pacific (ex. Japan) |
136 |
506 |
26,955 |
10 |
| Japan |
113 |
223 |
31,851 |
|
| Total |
1,156 |
4,999 |
488,586 |
987 |
NOTE 6: NOTES
TO THE BALANCE SHEET
6.1 Cash, central
banks
|
|
31.12.2018 |
31.12.2017 |
| € million |
Assets |
Liabilities |
Assets |
Liabilities |
| Cash |
11 |
|
13 |
|
| Central banks |
46,527 |
877 |
32,591 |
1,585 |
| Carrying amount |
46,538 |
877 |
32,604 |
1,585 |
6.2 Financial
assets and liabilities at fair value through profit or loss
FINANCIAL ASSETS
AT FAIR VALUE THROUGH PROFIT OR LOSS
| € million |
31.12.2018 |
| Financial assets held for trading |
240,560 |
| Other financial instruments at fair value through profit
or loss |
214 |
| Equity instruments |
100 |
| Debt instruments that do not meet the conditions of the
"SPPI" test |
114 |
| Assets backing unit-linked contracts |
|
| Financial assets designated at fair value through profit
or loss |
|
| Carrying amount |
240,774 |
| Of which lent securities |
2,852 |
| € million |
31.12.2017 |
| Financial assets held for trading |
236,858 |
| Financial assets designated at fair value through profit
or loss |
143 |
| Carrying amount |
237,001 |
| Of which lent securities |
884 |
HELD-FOR-TRADING
FINANCIAL ASSETS
| € million |
31.12.2018 |
| Equity instruments |
2,777 |
| Equity and other variable income securities |
2,777 |
| Debt securities |
19,447 |
| Treasury bills and similar securities |
14,116 |
| Bonds and other fixed income securities |
5,326 |
| Mutual funds |
5 |
| Loans and receivables |
110,184 |
| Loans and receivables due from credit institutions |
191 |
| Loans and receivables due from customers |
1,374 |
| Securities bought under repurchase agreements |
108,619 |
| Pledged securities |
|
| Derivative instruments |
108,152 |
| Carrying amount |
240,560 |
| € million |
31.12.2017 |
| Equity instruments |
3,485 |
| Equities and other variable income securities |
3,485 |
| Debt securities |
17,271 |
| Treasury bills and similar securities |
12,653 |
| Bonds and other fixed income securities |
4,618 |
| Loans and advances |
95,155 |
| Loans and receivables due from customers |
1,600 |
| Securities bought under repurchase agreements |
93,555 |
| Derivative instruments |
120,947 |
| Carrying amount |
236,858 |
Securities acquired under repurchase agreements include those that the entity is
authorised
to use as collateral.
EQUITY INSTRUMENTS
AT FAIR VALUE THROUGH PROFIT OR LOSS
| € million |
31.12.2018 |
| Equity and other variable income securities |
31 |
| Non-consolidated equity investments |
69 |
| Total equity instruments at fair value through profit
or loss |
100 |
DEBT INSTRUMENTS
NOT MEETING THE SPPI CRITERIA
| € million |
31.12.2018 |
| Debt securities |
38 |
| Treasury bills and similar securities |
|
| Bonds and other fixed income securities |
30 |
| Mutual funds |
8 |
| Loans and receivables |
76 |
| Loans and receivables due from credit institutions |
|
| Loans and receivables due from customers |
76 |
| Securities bought under repurchase agreements |
|
| Pledged securities |
|
| Total debt instruments that do not meet the conditions
of the "sppi" test |
114 |
FINANCIAL ASSETS
DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
| € million |
31.12.2017 |
| Loans and receivables |
|
| Loans and receivables due from credit institutions |
|
| Loans and receivables due from customers |
141 |
| Debt securities |
141 |
| Treasury bills and similar securities |
2 |
| Bonds and other fixed income securities |
2 |
| Total financial assets designated at fair value through
profit or loss |
143 |
FINANCIAL LIABILITIES
AT FAIR VALUE THROUGH PROFIT OR LOSS
| € million |
31.12.2018 |
31.12.2017 |
| Financial liabilities held for trading |
208,156 |
212,681 |
| Financial liabilities designated at fair value through
profit or loss |
26,724 |
24,490 |
| Carrying amount |
234,880 |
237,171 |
HELD-FOR-TRADING
FINANCIAL LIABILITIES
| € million |
31.12.2018 |
31.12.2017 |
| Securities sold short |
25,433 |
22,598 |
| Securities sold under repurchase agreements |
75,945 |
67,355 |
| Debt securities |
|
2 |
| Debts due to customers |
|
|
| Debts due to credit institutions |
|
|
| Derivative instruments |
106,778 |
122,726 |
| Carrying amount |
208,156 |
212,681 |
Detailed information on derivative instruments held-for-trading can be found in
Note
3.2 on market risk, in particular on interest rates.
FINANCIAL LIABILITIES
DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
♦ Financial liabilities
for which changes in issuer spread are recognised in non-recyclable
equity
|
|
31.12.2018 |
| € million |
Carrying amount |
Difference between carrying amount
and amount contractually required to pay at maturity |
Accumulated amount of change in
fair value attributable to changes in own credit risk |
Amount of change in fair value
during the period attributable to changes in own credit
risk
|
Amount realised at derecognition(1) |
| Deposits and subordinated liabilities |
|
|
|
|
|
| Debt securities |
26,724 |
138 |
138 |
(350) |
(18) |
| Other financial liabilities |
|
|
|
|
|
| Total |
26,724 |
138 |
138 |
(350) |
(18) |
(1)
The amount realised upon derecognition is transferred to consolidated reserves.
|
|
31.12.2017 |
| € million |
Fair value on the balance sheet |
Difference between book value and
amount due at maturity |
| Debt securities |
|
505 |
| Total |
24,490 |
505 |
Pursuant to IFRS 9, Crédit Agricole CIB calculates changes in fair value attributable
to changes in own credit risk using a methodology that allows for these changes to
be separated from changes in value attributable to changes in market conditions.
BASIS FOR CALCULATING
OWN CREDIT RISK
The source taken into account for the calculation of own credit risk may vary from
one issuer to another. In Crédit Agricole CIB, it is the variation in its market refinancing
cost depending on the type of issue.
CALCULATION OF
UNREALISED GAINS/LOSSES ON OWN CREDIT ADJUSTMENT (RECOGNISED IN OTHER
COMPREHENSIVE INCOME)
Crédit Agricole CIB's preferred approach is based on the liquidity component of
issues.
All issues are replicated by a group of vanilla loans/borrowings. Changes in fair
value attributable to changes in own credit risk of all issues therefore correspond
to those of said loans. These are equal to the changes in fair value of the loan book
caused by changes in the cost of refinancing.
CALCULATION OF
REALISED GAINS/LOSSES ON OWN CREDIT RISK (RECOGNISED IN CONSOLIDATED
RESERVES)
Crédit Agricole CIB opts to transfer the change in fair value attributable to variations
in own credit risk to consolidated reserves. When there is a total or partial early
redemption, a calculation based on sensitivities is carried out. It consists of measuring
the variation in fair value attributable to variations in own credit risk of a given
issue as being the sum of the sensitivities to the credit spread multiplied by the
variation in this spread between the issue date and that of the redemption.
6.3 Hedging derivative
instruments
Detailed information is provided in Note 3.4 on "Hedging accounting".
6.4 Financial
assets at fair value through other comprehensive income
|
|
31.12.2018 |
| € million |
Carrying amount |
Unrealised gains |
Unrealised losses |
| Debt instruments at fair value through other comprehensive
in-come that may be reclassified
to profit or loss
|
9,700 |
52 |
(22) |
| Equity instruments at fair value through other comprehensive
income that will not
be reclassified to profit or loss
|
1,662 |
160 |
(102) |
| Total |
11,362 |
212 |
(124) |
DEBT INSTRUMENTS
RECOGNISED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME THAT
CAN BE RECLASSIFIED
|
|
31.12.2018 |
| € million |
Carrying amount |
Unrealised gains |
Unrealised losses |
| Treasury bills and similar securities |
1,576 |
11 |
|
| Bonds and other fixed income securities |
8,124 |
41 |
(22) |
| Total Debt securities |
9,700 |
52 |
(22) |
| Total Loans and receivables |
|
|
|
| Total Debt instruments at fair value through other comprehensive
income that may be
reclassified to profit and loss
|
9,700 |
52 |
(22) |
| Income tax charge |
|
(10) |
1 |
| Other comprehensive income on debt instruments that will
not be reclassified to profit
or loss (net of income tax)
|
|
42 |
(21) |
EQUITY INSTRUMENTS
RECOGNISED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME THAT
CANNOT BE RECLASSIFIED
► Other comprehensive
income on equity instruments that cannot be reclassified
|
|
31.12.2018 |
| € million |
Carrying amount |
Unrealised gains |
Unrealised losses |
Unrealised gains/losses during
the period |
| Equity and other variable income securities |
38 |
31 |
(14) |
(4) |
| Non-consolidated equity investments |
1,624 |
129 |
(88) |
174 |
| Total Equity instruments at fair value through other
comprehensive income that will
not be reclassified to profit or loss
|
1,662 |
160 |
(102) |
170 |
| Income tax charge |
|
(66) |
9 |
(56) |
| Other comprehensive income on equity instruments that
will not be reclassified to
profit or loss (net of income tax)
|
|
94 |
(93) |
114 |
EQUITY INSTRUMENTS
DERECOGNISED DURING THE PERIOD
|
|
31.12.2018 |
| € million |
Fair value at the date of derecognition |
Cumulative gains realised(1) |
Cumulative losses realise(1) |
| Equity and other variable income securities |
20 |
5 |
(5) |
| Non-consolidated equity investments |
27 |
1 |
(73) |
| Total Investments in equity instruments |
47 |
6 |
(78) |
| Income tax charge |
|
|
12 |
| Other comprehensive income on equity instruments that
will not be reclassified to
profit or loss (net of income tax) (1) |
|
6 |
(66) |
(1)
Realised gains and losses are transferred to consolidated reserves at the moment of
the derecognition of the instrument concerned.
AVAILABLE-FOR-SALE
FINANCIAL ASSETS AT 31 DECEMBER 2017
|
|
31.12.2017 |
| € million |
Carrying amount |
Unrealised gains |
Unrealised losses |
| Treasury bills and similar securities |
8,143 |
34 |
4 |
| Bonds and other fixed income securities |
17,610 |
81 |
23 |
| Equities and other variable income securities |
98 |
26 |
|
| Non-consolidated equity investments |
1,453 |
78 |
142 |
| Available-for-sale receivables |
|
|
|
| Carrying amount of available-for-sale financial assets
(1) |
27,304 |
219 |
169 |
| Income tax charge |
|
(41) |
(6) |
| Gains and losses on available-for-sale financial assets
recognised in other comprehensive
income (net of in-come tax)
|
|
178 |
163 |
(1)
Of which €53 million impaired AFS fixed-income securities €237 million related to
impaired AFS variable income securities.
No guarantees received on impaired outstandings.
No significant i.e. less than 90 days past-due.
6.5 Financial
assets at amortised cost
| € million |
31.12.2018 |
| Loans and receivables due from credit institutions |
19,172 |
| Loans and receivables due from customers |
134,302 |
| Debt securities |
27,897 |
| Carrying amount |
181,371 |
LOANS AND RECEIVABLES
DUE FROM CREDIT INSTITUTIONS
| € million |
31.12.2018 |
| Credit institutions |
|
| Loans and receivables |
18,583 |
| of which non doubtful current accounts in debit (1) |
3,077 |
| of which non doubtful overnight accounts and advances
(1) |
426 |
| Pledged securities |
|
| Securities bought under repurchase agreements |
969 |
| Subordinated loans |
|
| Other loans and receivables |
16 |
| Gross amount |
19,568 |
| Impairment |
(396) |
| Net value of loans and receivables due from credit institutions |
19,172 |
| Total Crédit Agricole internal transactions |
|
| CARRYING AMOUNT |
19,172 |
(1)
These transactions are partly comprised of the item "Net demand loans and deposits
with credit institutions" on the Cash Flow Statement
| € million |
31.12.2017 |
| Credit institutions |
|
| Debt securities |
|
| Securities not traded in an active market |
|
| Loans and receivables |
26,652 |
| Accounts and loans |
25,926 |
| of which performing current accounts in debit |
2,844 |
| of which performing overnight accounts and advances |
2,605 |
| Securities bought under repurchase agreements |
725 |
| Subordinated loans |
1 |
| Gross amount |
26,652 |
| Impairment |
(383) |
| Carrying amount |
26,269 |
LOANS AND RECEIVABLES
DUE FROM CUSTOMERS
| € million |
31.12.2018 |
| Loans and receivables due from customers |
|
| Trade receivables |
21,761 |
| Other customer loans |
109,730 |
| Pledged securities |
|
| Securities bought under repurchase agreements |
336 |
| Subordinated loans |
100 |
| Insurance receivables |
|
| Reinsurance receivables |
|
| Advances in associates' current accounts |
137 |
| Current accounts in debit |
4,571 |
| Gross amount |
136,635 |
| Impairment |
(2,333) |
| Net value of loans and receivables due from customers |
134,302 |
| Finance leases |
|
| Property leasing |
|
| Equipment leases, operating leases and similar transactions |
|
| Gross amount |
|
| Impairment |
|
| Net value of lease financing operations |
|
| Carrying amount |
134,302 |
| € million |
31.12.2017 |
| Loans and receivables due from customers |
|
| Debt securities |
14,723 |
| Securities not traded in an active market |
14,723 |
| Loans and receivables |
123,392 |
| Trade receivables |
16,865 |
| Other customer loans |
100,645 |
| Securities bought under repurchase agreements |
937 |
| Subordinated loans |
100 |
| Advances in associates current accounts |
115 |
| Current accounts in debit |
4,730 |
| Gross amount |
138,115 |
| Impairment |
(3,076) |
| Net value of loans and receivables due from customers |
135,039 |
| Finance Leases |
|
| Property leasing |
|
| Gross amount |
|
| Net value of lease financing operations |
|
| Carrying amount |
135,039 |
DEBT SECURITIES
| € million |
31.12.2018 |
| Treasury bills and similar securities |
7,285 |
| Bonds and other fixed income securities |
20,629 |
| Total |
27,914 |
| Impairment |
(17) |
| Carrying amount |
27,897 |
6.6 Transferred
assets not derecognised or derecognised with on-going involvement
TRANSFERRED ASSETS
NOT DERECOGNISED IN FULL AT 31 DECEMBER 2018
|
|
Transferred assets
but still fully recognised |
|
|
Transferred assets |
Associated liabilities |
|
|
Carrying amount |
Of which securitisation (non- deconsolidating) |
Of which securities sold/bought
under repurchase agreements |
Of which other |
Fair value(1) |
Carrying amount |
| Financial assets held for trading |
10,488 |
|
10,488 |
|
10,488 |
10,137 |
| Equity instruments |
1,665 |
|
1,665 |
|
1,665 |
1,609 |
| Debt securities |
8,823 |
|
8,823 |
|
8,823 |
8,528 |
| Loans and receivables |
|
|
|
|
|
|
| Other financial instruments at fair value through profit
or loss |
|
|
|
|
|
|
| Equity instruments |
|
|
|
|
|
|
| Debt securities |
|
|
|
|
|
|
| Loans and receivables |
|
|
|
|
|
|
| Financial assets at fair value through other comprehensive
income |
1,350 |
|
1,350 |
|
1,350 |
1,279 |
| Equity instruments |
|
|
|
|
|
|
| Debt securities |
1,350 |
|
1,350 |
|
1,350 |
1,279 |
| Loans and receivables |
|
|
|
|
|
|
| Financial assets at amortised cost |
626 |
|
626 |
|
626 |
605 |
| Debt securities |
626 |
|
626 |
|
626 |
605 |
| Loans and receivables |
|
|
|
|
|
|
| Loans and receivables |
12,464 |
|
12,464 |
|
12,464 |
12,021 |
| Finance leases |
|
|
|
|
|
|
| Total transferred assets |
12,464 |
|
12,464 |
|
12,464 |
12,021 |
|
|
Transferred assets
but still fully recognised |
|
|
Associated liabilities |
|
Assets and associated liabilities |
|
|
Of which securitisation (non- deconsolidating) |
Of which securities sold/bought
under repurchase agreements |
Of which other |
Fair value(1) |
Net fair value(1) |
| Financial assets held for trading |
|
10,137 |
|
10,137 |
350 |
| Equity instruments |
|
1,609 |
|
1,609 |
55 |
| Debt securities |
|
8,528 |
|
8,528 |
295 |
| Loans and receivables |
|
|
|
|
|
| Other financial instruments at fair value through profit
or loss |
|
|
|
|
|
| Equity instruments |
|
|
|
|
|
| Debt securities |
|
|
|
|
|
| Loans and receivables |
|
|
|
|
|
| Financial assets at fair value through other comprehensive
income |
|
1,279 |
|
1,279 |
71 |
| Equity instruments |
|
|
|
|
|
| Debt securities |
|
1,279 |
|
1,279 |
71 |
| Loans and receivables |
|
|
|
|
|
| Financial assets at amortised cost |
|
605 |
|
605 |
21 |
| Debt securities |
|
605 |
|
605 |
21 |
| Loans and receivables |
|
|
|
|
|
| Loans and receivables |
|
12,021 |
|
12,021 |
442 |
| Finance leases |
|
|
|
|
|
| Total transferred assets |
|
12,021 |
|
12,021 |
442 |
(1)
In the event that the "guarantee of the other party to the agreement giving rise to
the associated liabilities is limited to the transferred assets" (FRS 7.42D. (D)).
TRANSFERRED ASSETS
NOT DERECOGNISED IN FULL AT 31 DECEMBER 2017
|
|
Transferred assets
still fully recognised |
|
|
Transferred assets |
Associated liabilities |
|
|
Carrying amount |
Of which securisation (non- deconsolidating) |
Of which securities bought under
repurchase agreements |
Of which other |
Fair value(1) |
Carrying amount |
| Held-for-trading |
13,318 |
|
13,318 |
|
13,318 |
12,866 |
| Equity instruments |
177 |
|
177 |
|
177 |
177 |
| Debt securities |
13,141 |
|
13,141 |
|
13,141 |
12,689 |
| Loans and advances |
|
|
|
|
|
|
| Designated at fair value through profit and loss |
|
|
|
|
|
|
| Equity instruments |
|
|
|
|
|
|
| Debt securities |
|
|
|
|
|
|
| Loans and advances |
|
|
|
|
|
|
| Designated at fair value through equity |
2,065 |
|
2,065 |
|
2,065 |
1,956 |
| Equity instruments |
|
|
|
|
|
|
| Debt securities |
2,065 |
|
2,065 |
|
2,065 |
1,956 |
| Loans and advances |
|
|
|
|
|
|
| Financial assets at amortized cost |
|
|
|
|
|
|
| Debt securities |
|
|
|
|
|
|
| Loans and advances |
|
|
|
|
|
|
| Total financial assets |
|
|
|
|
|
|
| Finance leases |
|
|
|
|
|
|
| Total transferred assets |
15,383 |
|
15,383 |
|
15,383 |
14,822 |
|
|
Transferred assets
still fully recognised |
|
|
Associated liabilities |
|
|
Of which securisation (non-deconsolidating) |
Of which securities bought under
repurchase agreements |
Of which other |
Fair value(1) |
| Held-for-trading |
|
12,866 |
|
12,866 |
| Equity instruments |
|
177 |
|
177 |
| Debt securities |
|
12,689 |
|
12,689 |
| Loans and advances |
|
|
|
|
| Designated at fair value through profit and loss |
|
|
|
|
| Equity instruments |
|
|
|
|
| Debt securities |
|
|
|
|
| Loans and advances |
|
|
|
|
| Designated at fair value through equity |
|
1,956 |
|
1,956 |
| Equity instruments |
|
|
|
|
| Debt securities |
|
1,956 |
|
1,956 |
| Loans and advances |
|
|
|
|
| Financial assets at amortized cost |
|
|
|
|
| Debt securities |
|
|
|
|
| Loans and advances |
|
|
|
|
| Total financial assets |
|
|
|
|
| Finance leases |
|
|
|
|
| Total transferred assets |
|
14,822 |
|
14,822 |
(1)
In the event that the "guarantee of the other party to the agreement giving rise to
the associated liabilities is limited to the transferred assets" (FRS 7.42D. (D)).
6.7 Exposure to
sovereign risk
The scope of sovereign exposures recorded covers exposures to Governments, but
does
not include local authorities. Tax debt is excluded from these amounts.
Exposure to sovereign debt corresponds to an exposure net of impairment (carrying
amount) presented both gross and net of hedging. Crédit Agricole CIB's exposures to
the sovereign risk are as follows:
BANKING ACTIVITY
|
|
31.12.2018 |
|
|
Exposures Banking
activity net of impairment |
|
|
Other financial instruments
at fair value through profit or loss |
Financial assets at fair value
through other comprehensive income that may be reclassified
to profit or loss
|
Financial assets at amortised cost |
Total banking activity before hedging |
Hedging |
| € million |
Held-for- trading financial assets |
Other financial instruments at
fair value through profit or loss |
|
|
|
|
| Germany |
|
|
|
|
|
|
| Saudi Arabia |
8 |
|
|
880 |
888 |
|
| Austria |
|
|
|
15 |
15 |
|
| Belgium |
50 |
|
74 |
184 |
308 |
(2) |
| Brazil |
381 |
|
|
211 |
592 |
|
| China |
6 |
|
|
19 |
25 |
|
| Spain |
|
|
332 |
52 |
384 |
|
| United States |
1,577 |
|
|
1,610 |
3,187 |
|
| Finland |
|
|
|
|
|
|
| France |
|
|
899 |
1,860 |
2,759 |
(22) |
| Hong Kong |
71 |
|
|
978 |
1,049 |
|
| Ireland |
|
|
|
|
|
|
| Italy |
494 |
|
|
|
494 |
|
| Japan |
23 |
|
|
1,948 |
1,971 |
|
| Luxembourg |
5 |
|
|
|
5 |
|
| Morrocco |
18 |
|
|
|
18 |
|
| Netherlands |
|
|
|
|
|
|
| Portugal |
|
|
|
|
|
|
| Russia |
1 |
|
6 |
|
7 |
|
| Slovakia |
8 |
|
9 |
|
17 |
|
| Sweden |
|
|
|
66 |
66 |
|
| Syria |
|
|
|
|
|
|
| Turkey |
|
|
|
|
|
|
| Ukraine |
|
|
|
|
|
|
| Venezuela |
|
|
|
59 |
59 |
|
| Yemen |
|
|
|
|
|
|
| Total |
2,642 |
|
1,320 |
7,882 |
11,844 |
(24) |
|
|
31.12.2018 |
|
|
Exposures Banking activity net
of impairment |
|
|
Total banking activity after hedging |
| € million |
|
| Germany |
|
| Saudi Arabia |
888 |
| Austria |
15 |
| Belgium |
306 |
| Brazil |
592 |
| China |
25 |
| Spain |
383 |
| United States |
3,187 |
| Finland |
|
| France |
2,737 |
| Hong Kong |
1,049 |
| Ireland |
|
| Italy |
494 |
| Japan |
1,971 |
| Luxembourg |
5 |
| Morrocco |
18 |
| Netherlands |
|
| Portugal |
|
| Russia |
7 |
| Slovakia |
17 |
| Sweden |
66 |
| Syria |
|
| Turkey |
|
| Ukraine |
|
| Venezuela |
59 |
| Yemen |
|
| Total |
11,819 |
|
|
31.12.2017 |
|
|
Exposures net of
impairment |
|
|
Of which banking
portfolio |
Of which trading book (excluding
derivatives) |
Total banking activity before hedging |
Hedging available for sale financial
assets |
| € million |
Available for sale financial assets |
Financial assets at fair value
through profit or loss |
Loans and receivables |
|
|
|
| Germany |
|
8 |
|
|
8 |
|
| Saudi Arabia |
|
|
542 |
2 |
542 |
|
| Belgium |
|
432 |
|
|
432 |
|
| Brazil |
|
7 |
38 |
87 |
45 |
|
| China |
|
65 |
|
3 |
65 |
|
| Spain |
|
823 |
|
|
823 |
|
| United States |
|
|
|
617 |
|
|
| France |
|
2,378 |
1,435 |
|
3,813 |
(93) |
| Hong-Kong |
|
1,044 |
|
39 |
1,044 |
|
| Italy |
|
|
46 |
64 |
46 |
|
| Japan |
|
2,635 |
255 |
|
2,890 |
|
| Portugal |
|
|
|
8 |
|
|
| Russia |
|
8 |
|
5 |
8 |
|
| Venezuela |
|
|
4 |
|
4 |
|
| Total |
|
7,400 |
2,320 |
825 |
9,720 |
(93) |
|
|
31.12.2017 |
|
|
Exposures net of impairment |
|
|
Total banking activity after hedging |
| € million |
|
| Germany |
8 |
| Saudi Arabia |
542 |
| Belgium |
432 |
| Brazil |
45 |
| China |
65 |
| Spain |
823 |
| United States |
|
| France |
3,720 |
| Hong-Kong |
1,044 |
| Italy |
46 |
| Japan |
2,890 |
| Portugal |
|
| Russia |
8 |
| Venezuela |
4 |
| Total |
9,627 |
6.8 Financial
liabilities at amortised cost
| € million |
31.12.2018 |
| Due to credit institutions |
47,302 |
| Due to customers |
123,510 |
| Debt securities |
51,541 |
| Carrying amount |
222,353 |
DUE TO CREDIT
INSTITUTIONS
| € million |
31.12.2018 |
31.12.2017 |
| Credit institutions |
|
|
| Accounts and borrowings |
45,525 |
42,780 |
| of which current accounts in credit (1) |
6,255 |
3,142 |
| of which overnight accounts and deposits (1) |
747 |
1,215 |
| Securities sold under repurchase agreements |
1,777 |
1,222 |
| Total |
47,302 |
44,002 |
| Carrying amount |
47,302 |
44,002 |
(1)
These transactions are partly comprised of the item "Net demand loans and deposits
with credit institutions" on the Cash Flow Statement.
DUE TO CUSTOMERS
| € million |
31.12.2018 |
31.12.2017 |
| Current accounts in credit |
45,971 |
40,114 |
| Special savings accounts |
151 |
150 |
| Other amounts due to customers |
76,849 |
65,335 |
| Securities sold under repurchase agreements |
539 |
1,361 |
| Insurance liabilities |
|
|
| Reinsurance liabilities |
|
|
| Cash deposits received from ceding and retroceding companies
against technical insurance
commitments
|
|
|
| Carrying amount |
123,510 |
106,960 |
DEBT INSTRUMENTS
| € million |
31.12.2018 |
31.12.2017 |
| Interest bearing notes |
|
|
| Money-market securities |
|
|
| Negotiable debt securities |
49,280 |
46,738 |
| Bonds |
2,261 |
1,239 |
| Other debt securities |
|
|
| Carrying amount |
51,541 |
47,977 |
6.9 Information
on the offsetting of financial assets and financial liabilities
OFFSETTING - FINANCIAL
ASSETS
|
|
31.12.2018 |
|
|
Offsetting effects
on financial assets covered by master netting agreements and similar
agreements
|
|
|
|
|
|
Other amounts that
can be offset under given conditions |
|
| € million |
Gross amounts of recognised financial
assets before offsetting |
Gross amounts of recognised financial
liabilities set off in the financial statements |
Net amounts of financial assets
presented in the financial statements |
Gross amounts of financial liabilities
covered by master netting agreements |
Amounts of other financial instruments
received as collateral, including security
deposits
|
Net amount after all offsetting
effects |
| Derivatives |
167,820 |
57,540 |
110,280 |
82,881 |
13,399 |
14,001 |
| Reverse repurchase agreements |
162,157 |
53,233 |
109,924 |
7,038 |
98,797 |
4,088 |
| Total financial assets subjects to offsetting |
329,977 |
109,773 |
220,204 |
89,919 |
112,196 |
18,089 |
|
|
31.12.2017 |
|
|
Offsetting effects
on financial assets covered by master netting agreements and similar
agreements
|
|
|
|
|
|
Other amounts that
can be offset under given conditions |
|
| € million |
Gross amounts of recognised financial
assets before offsetting |
Gross amounts of recognised financial
liabilities set off in the financial statements |
Net amounts of financial assets
presented in the financial statements |
Gross amounts of financial liabilities
covered by master netting agreements |
Amounts of other financial instruments
received as collateral, including security
deposits
|
Net amount after all offsetting
effects |
| Derivatives |
198,318 |
75,436 |
122,882 |
100,433 |
8,470 |
13,979 |
| Reverse repurchase agreements |
124,864 |
29,647 |
95,217 |
12,096 |
82,542 |
579 |
| Total financial assets subjects to offsetting |
323,182 |
105,083 |
218,099 |
112,529 |
91,012 |
14,558 |
OFFSETTING - FINANCIAL
LIABILITIES
|
|
31.12.2018 |
|
|
Offsetting effects
on financial assets covered by master netting agreements and similar
agreements
|
|
|
|
|
|
Other amounts that
can be offset under given conditions |
|
| € million |
Gross amounts of recognised financial
assets before offsetting |
Gross amounts of recognised financial
liabilities set off in the financial statements |
Net amounts of financial assets
presented in the financial statements |
Gross amounts of financial liabilities
covered by master netting agreements |
Amounts of other financial instruments
received as collateral, including security
deposits
|
Net amount after all offsetting
effects |
| Derivatives |
166,420 |
57,540 |
108,880 |
82,881 |
24,052 |
1,947 |
| Repurchase agreements |
130,506 |
52,233 |
78,273 |
7,038 |
66,398 |
4,836 |
| Total financial liabilities subject to offsetting |
296,926 |
109,773 |
187,153 |
89,919 |
90,450 |
6,783 |
|
|
31.12.2017 |
|
|
Offsetting effects
on financial assets covered by master netting agreements and similar
agreements
|
|
|
|
|
|
Other amounts that
can be offset under given conditions |
|
| € million |
Gross amounts of recognised financial
assets before offsetting |
Gross amounts of recognised financial
liabilities set off in the financial statements |
Net amounts of financial assets
presented in the financial statements |
Gross amounts of financial liabilities
covered by master netting agreements |
Amounts of other financial instruments
received as collateral, including security
deposits
|
Net amount after all offsetting
effects |
| Derivatives |
200,127 |
75,436 |
124,692 |
100,433 |
13,948 |
10,311 |
| Repurchase agreements |
99,586 |
29,647 |
69,938 |
12,096 |
55,059 |
2,784 |
| Total financial liabilities subject to offsetting |
299,713 |
105,083 |
194,630 |
112,529 |
69,007 |
13,095 |
6.10 Current and
deferred tax assets and liabilities
| € million |
31.12.2018 |
31.12.2017 |
| Current tax |
546 |
490 |
| Deferred tax |
599 |
614 |
| Total current and deferred tax assets |
1,145 |
1,104 |
| Current tax |
461 |
261 |
| Deferred tax |
1,498 |
1,327 |
| Total current and deferred tax liabilities |
1,959 |
1,588 |
Net deferred tax assets and liabilities break down as follows:
|
|
31.12.2018 |
| € million |
Deferred tax assets |
Deferred tax liabilities |
| Temporary timing differences - tax |
464 |
1,234 |
| Non-deductible accrued expenses |
145 |
|
| Non-deductible for liabilities and charges |
260 |
|
| Other temporary differences (1) |
59 |
1,234 |
| Deferred tax on reserves for unrealised gains or losses |
94 |
138 |
| Financial assets at fair value through other comprehensive
income |
12 |
79 |
| Cash flow hedges |
1 |
83 |
| Gains and losses/Actuarial differences |
40 |
(24) |
| Other comprehensive income attributable to changes in
own credit risk |
41 |
|
| Deferred tax on income and reserves |
40 |
126 |
| Total deferred tax |
598 |
1,498 |
(1)
The portion of deferred tax related to tax loss carryforwards is €30 million for 2018
compared to €43 million for 2017.
|
|
31.12.2017 |
| € million |
Deferred tax assets |
Deferred tax liabilities |
| Temporary timing differences - tax |
474 |
1,209 |
| Non-deductible accrued expenses |
129 |
|
| Non-deductibles provisions for liabilities and charges |
206 |
|
| Other temporary differences (1) |
139 |
1,209 |
| Deferred tax on reserves for unrealised gains or losses |
57 |
131 |
| Available-for-sale assets |
|
39 |
| Cash flow hedges |
1 |
125 |
| Gains and losses/Actuarial differences |
56 |
(33) |
| Deferred tax on income and reserves |
140 |
44 |
| Offsets impacts |
(57) |
(57) |
| Total deferred tax |
614 |
1,327 |
(1)
The portion of deferred tax related to tax loss carryforwards is €43 million for 2017
compared to €50 million for 2016.
The deferred tax is netted on the balance sheet by level of fiscal integration.
In order to determine the level of deferred tax asset to be recognised, Crédit
Agricole
CIB takes into account, for each entity or fiscal group concerned, the applicable
tax regime and the income projections made during budgeting.
6.11 Accruals,
deferred income and sundry assets and liabilities
ACCRUALS, DEFERRED
INCOME AND SUNDRY ASSETS
| € million |
31.12.2018 |
31.12.2017 |
| Other assets |
25,050 |
23,491 |
| Inventory accounts and miscellaneous |
98 |
95 |
| Sundry debtors |
23,604 |
21,986 |
| Settlement accounts |
1,348 |
1,410 |
| Other insurance assets |
|
|
| Reinsurer's share of technical reserves |
|
|
| Accruals and deferred income |
2,812 |
3,096 |
| Items in course of transmission |
1,856 |
2,190 |
| Adjustment and suspense accounts |
316 |
207 |
| Accrued income |
371 |
303 |
| Prepaid expenses |
120 |
70 |
| Other accrual prepayments and sundry assets |
149 |
326 |
| Carrying amount |
27,862 |
26,587 |
ACCRUALS, DEFERRED
INCOME AND SUNDRY LIABILITIES
| € million |
31.12.2018 |
31.12.2017 |
| Other liabilities |
18,019 |
17,369 |
| Settlement accounts |
1,287 |
1,387 |
| Sundry creditors |
16,732 |
15,982 |
| Remaining payments to be made on securities |
|
|
| Other insurance liabilities |
|
|
| Regularisation accounts |
5,468 |
5,265 |
| Items in course of transmission |
2,185 |
2,850 |
| Adjustment and suspense accounts |
759 |
93 |
| Unearned income |
312 |
280 |
| Accrued expenses |
2,076 |
1,957 |
| Other accrual prepayments and sundry liabilities |
136 |
85 |
| Carrying amount |
23,487 |
22,634 |
6.12 Joint ventures
and associates
The market value shown in the table above is the quoted price of the shares on
the
market at 31 December 2018. This value may not be representative of the selling value
since the value in use of equity-accounted entities may be different from the equity-
accounted value determined pursuant to IAS 28. Investments in equity-accounted entities
were subject to impairment tests using the same methodology as for goodwill, i.e.
by using expected future cash flow estimates of the companies in question and by using
the valuation parameters described in Note 6.14 "Goodwill".
FINANCIAL INFORMATION
OF JOINT VENTURES AND ASSOCIATES
At 31 December 2018,
| ― |
the equity-accounted value of joint ventures was nil as it was
fully impaired (same
situation at 31 December 2017),
|
| ― |
the equity-accounted value of associates was nil following the
partial sale of the
BSF securities. This entity was deconsolidated as a result of the loss of significant
influence following the sale, on 20 September 2017, of 16.2% of the shares held by
Crédit Agricole CIB,
|
| ― |
Crédit Agricole CIB holds interests in two joint ventures. Significant
associates
and joint ventures are presented in the table of note 6.12.1. These are the main joint
ventures and associates that make up the "equity-accounted value in the balance sheet".
|
6.12.1 JOINT VENTURES
AND ASSOCIATES: INFORMATION
|
|
31.12.2018 |
| € million |
% of interest |
Equity- accounted value |
Share of market value |
Dividends paid to Group's entities |
Share of net income |
Share of shareholders' equity(1) |
| Joint ventures |
|
|
|
|
|
|
| Elipso |
50.00% |
|
|
|
|
(49) |
| UBAF |
47.01% |
|
|
|
|
154 |
| Net carrying amount of investments in equity-accounted
entities (Joint ventures) |
|
|
|
|
|
105 |
| Associates |
|
|
|
|
|
|
| Net carrying amount of investments in equity-accounted
entities (Associates) |
|
|
|
|
|
|
| Net carrying amount of investments in equity-accounted
entities |
|
|
|
|
|
105 |
|
|
31.12.2018 |
| € million |
Goodwill |
| Joint ventures |
|
| Elipso |
|
| UBAF |
|
| Net carrying amount of investments in equity-accounted
entities (Joint ventures) |
|
| Associates |
|
| Net carrying amount of investments in equity-accounted
entities (Associates) |
|
| Net carrying amount of investments in equity-accounted
entities |
|
(1)
Equity Group share in the financial statements of the joint venture or associate when
the joint venture or associate is a sub-group.
|
|
31.12.2017 |
| € million |
% of interest |
Equity- accounted value |
Share of market value |
Dividends paid to Group's entities |
Share of net income |
Share of shareholders' equity(1) |
| Joint ventures |
|
|
|
|
|
|
| FCA BANK |
50.00% |
|
|
|
|
(49) |
| UBAF |
47.01% |
|
|
|
2 |
153 |
| Net carrying amount of investments in equity-accounted
entities (Joint ventures) |
|
|
|
|
2 |
104 |
| Associates (2) |
|
|
|
|
|
|
| Banque Saudi Fransi |
14.90% |
|
|
92 |
173 |
|
| Net carrying amount of investments in equity-accounted
entities (Associates) |
|
|
|
92 |
173 |
|
| Net carrying amount of investments in equity-accounted
entities |
|
|
|
|
175 |
104 |
(1)
Equity Group share in the financial statements of the joint venture or associate when
the joint venture or associate is a sub-group.
(2)
Associates - The contribution of BSF to profit calculated under the equity method
covers the period from 1 January 2017to 20 September 2017, deconsolidation date following
the disposal of a portion of its equity investment.
6.12.2 JOINT VENTURES
AND ASSOCIATES: DETAILED INFORMATION
The summary financial information of the joint ventures and significant associates
of Crédit Agricole CIB is presented below:
|
|
31.12.2018 |
| € million |
Revenues |
Net income |
Total assets |
Total Equity |
| Joint ventures |
|
|
|
|
| Elipso |
|
(1) |
58 |
(99) |
| UBAF |
43 |
3 |
1,962 |
329 |
| Total |
43 |
2 |
2,020 |
230 |
|
|
31.12.2017 |
| € million |
Revenues |
Net income |
Total assets |
Total Equity |
| Joint ventures |
|
|
|
|
| Elipso |
(44) |
(44) |
74 |
(98) |
| UBAF |
53 |
(6) |
1,695 |
326 |
| Total |
9 |
(50) |
1,769 |
228 |
SIGNIFICANT RESTRICTIONS
ON JOINT VENTURES AND ASSOCIATES
Crédit Agricole CIB is subject to the following restrictions:
♦ Regulatory constraints
The subsidiaries of Crédit Agricole CIB are subject to prudential regulation and
regulatory
capital requirements in their host countries. The minimum equity capital (solvency
ratio), leverage ratio and liquidity ratio requirements limit the capacity of these
entities to pay dividends or to transfer assets to Crédit Agricole CIB.
♦ Legal constraints
The subsidiaries of the Crédit Agricole CIB group are subject to legal provisions
concerning the distribution of capital and distributable earnings. These requirements
limit the ability of the subsidiaries to distribute dividends. In the majority of
cases, these are less restrictive than the regulatory limitations mentioned above;
6.13 Property,
plant & equipment and intangible assets (excluding goodwill)
| € million |
31.12.2017 |
01.01.2018 |
Changes in scope |
Increases (acquisitions) |
Decreases (disposals and redemptions) |
Translation adjustments |
| Property, plant & equipment used in operations |
|
|
|
|
|
|
| Gross amount |
1,130 |
1,130 |
5 |
53 |
(33) |
24 |
| Amortisation and impairment (1) |
(791) |
(791) |
(6) |
(45) |
33 |
(14) |
| Carrying amount |
339 |
339 |
|
8 |
|
11 |
| Intangible assets |
|
|
|
|
|
|
| Gross amount |
775 |
775 |
|
105 |
(1) |
4 |
| Amortisation and impairment |
(542) |
(542) |
|
(42) |
1 |
(1) |
| Carrying amount |
233 |
233 |
|
64 |
|
3 |
| € million |
Autres mouvements |
31.12.2018 |
| Property, plant & equipment used in operations |
|
|
| Gross amount |
|
1,179 |
| Amortisation and impairment (1) |
(1) |
(824) |
| Carrying amount |
(1) |
356 |
| Intangible assets |
|
|
| Gross amount |
|
885 |
| Amortisation and impairment |
|
(584) |
| Carrying amount |
|
301 |
(1)
Including depreciation on fixed assets under operating leases.
| € million |
31.12.2016 |
Changes in scope |
Increases (acquisitions) |
Decreases (disposals and redemptions) |
Translation adjustments |
Other movements |
| Property, plant & equipment used in operations |
|
|
|
|
|
|
| Gross amount |
1,154 |
|
48 |
(10) |
(60) |
(2) |
| Amortisation and impairment (1) |
(789) |
|
(46) |
8 |
38 |
(2) |
| Carrying amount |
365 |
|
2 |
(2) |
(22) |
(4) |
| Intangible assets |
|
|
|
|
|
|
| Gross amount |
659 |
|
125 |
2 |
(11) |
|
| Amortisation and impairment |
(502) |
|
(45) |
|
5 |
|
| Carrying amount |
157 |
|
80 |
2 |
(6) |
|
| € million |
31.12.2017 |
| Property, plant & equipment used in operations |
|
| Gross amount |
1,130 |
| Amortisation and impairment (1) |
(791) |
| Carrying amount |
339 |
| Intangible assets |
|
| Gross amount |
775 |
| Amortisation and impairment |
(542) |
| Carrying amount |
233 |
(1)
Including depreciation on fixed assets under operating leases.
6.14 Goodwill
| € million |
31.12.2017 GROSS |
31.12.2017 NET |
01.01.2018 GROSS |
01.01.2018 NET |
Increases (acquisitions)(1) |
Decreases (Divestments) |
| Financing activities and investment banking |
654 |
484 |
654 |
484 |
|
|
| Wealth management |
503 |
503 |
503 |
503 |
22 |
|
| Other activities |
|
|
|
|
|
|
| Total |
1,157 |
987 |
1,157 |
987 |
22 |
|
| € million |
Impairment losses during the period |
Translation adjustments |
Other movements |
31.12.2018 GROSS |
31.12.2018 NET |
| Financing activities and investment banking |
|
|
|
654 |
484 |
| Wealth management |
|
16 |
|
541 |
541 |
| Other activities |
|
|
|
|
|
| Total |
|
16 |
|
1,195 |
1,025 |
(1)
The €22 million increase is related to the acquisition of Banca Leonardo (see NOTE
2: major structural transactions and material events during the period).
| € million |
31.12.2017 GROSS |
31.12.2017 NET |
Increases (acquisitions)(1) |
Decreases (Divestments) |
Impairment losses during the period |
Translation adjustments |
| Financing activities and investment banking |
655 |
485 |
|
|
|
(1) |
| Wealth management |
538 |
538 |
|
|
|
(35) |
| Other activities |
|
|
|
|
|
|
| Total |
1,193 |
1,023 |
|
|
|
(36) |
| € million |
Other movements |
31.12.2017 GROSS |
31.12.2017 NET |
| Financing activities and investment banking |
|
654 |
484 |
| Wealth management |
|
503 |
503 |
| Other activities |
|
|
|
| Total |
|
1,157 |
987 |
Impairment tests were carried out on the goodwill, based on an assessment of the
value
in use of the CGUs to which it is attached. The determination of value in use was
calculated by discounting the CGU's estimated future cash flows calculated from the
medium-term plans developed for Group management purposes.
The following assumptions were used:
| ― |
estimated future flows: data forecasts compiled from projected
four-year budgets as
part of the updating of the Medium-Term Plan.
|
The projections of the business departments have been prepared on the basis of
the
October 2018 economic scenario, with the following assumptions:
| ― |
a solid and more homogeneous growth in the euro zone, but with
persistent levels of
moderate inflation. The upturn in the long rates of core countries will be weaker
than forecast due to a rise in risk aversion, in turn due to trade tensions and worries
over the Italian budget policy;
|
| ― |
US growth which remains at high levels but will reach a turning
point in about 2020,
whilst inflation continues to rise due to trade tensions and the rise in oil prices;
|
| ― |
a contrasting situation with regard to the emerging countries:
continuation of the
slowdown in China, slight rise in Russian growth. A strong upturn in growth is forecast
in Brazil and growth in India is expected to stabilise at levels slightly higher than
current levels;
|
| ― |
own funds allocated: 9.71% of risk weighted assets for the 2
CGUs (up 21 bp compared
with 31 December 2017, due to the rise of contra-cyclical cushions applicable in certain
countries);
|
| ― |
perpetual growth rate: 2%. The perpetual growth rates at 31 December
2018 were identical
to those used at 31 December 2017 and reflect the growth forecasts of Crédit Agricole
CIB for the two CGUs;
|
| ― |
discount rate: between 8.70% and 9,0%. The setting of discount
rates at 31 December
2018 for all CGUs reflects the sustained fall in long-term interest rates observed
in Europe and particularly in France for several years now, although this is counter-balanced
by a rise in the risk premium for the banking sector. Overall, the rates used up compared
with the end of 2017 for the 2 CGUs (between +13 bp and +23 bp), consistent with the
rate assumptions used to create budgets and projections of entities.
|
The sensitivity tests on goodwill - Group share have only shown an impairment requirement
on Corporate and Investment Banking:
| ― |
a variation of +50 basis points in the rate of allocation of
own funds to the CGU
would lead to an impairment in the order to €220 million of goodwill on the CGU Corporate
and Investment Banking;
|
| ― |
a variation of +50 basis points of the discount rate would lead
to a total impairment
of goodwill on the CGU Corporate and Investment Banking;
|
| ― |
a variation of +100 basis points of the cost/income ratio during
the final year would
lead to an impairment in the order of €130 million of goodwill on the CGU Corporate
and Investment Banking;
|
| ― |
a variation of +10 basis points of the cost of risk during the
final year would lead
to a total impairment of goodwill on the CGU Corporate and Investment Banking.
|
6.15 Provisions
| € million |
31.12.2017 |
01.01.2018 |
Changes in scope |
Additions |
Reversals, amounts used |
Reversals, amounts not used |
| Home purchase schemes risks |
|
|
|
|
|
|
| Execution risks of commitments by signature |
221 |
527 |
|
464 |
(43) |
(584) |
| Operational risks |
1 |
1 |
|
4 |
|
|
| Employee retirement and similar benefits |
554 |
554 |
(1) |
35 |
(64) |
(6) |
| Litigation |
607 |
607 |
5 |
125 |
(39) |
(37) |
| Equity investments |
2 |
2 |
|
|
|
|
| Restructuring |
1 |
1 |
|
|
|
|
| Other risks |
48 |
48 |
2 |
41 |
(5) |
(8) |
| Total |
1,434 |
1,740 |
6 |
669 |
(151) |
(635) |
| € million |
Translation adjustments |
Other movements |
31.12.2018 |
| Home purchase schemes risks |
|
|
|
| Execution risks of commitments by signature |
8 |
|
372 |
| Operational risks |
|
|
5 |
| Employee retirement and similar benefits |
10 |
(28) |
500 |
| Litigation |
5 |
55 |
721 |
| Equity investments |
|
(1) |
1 |
| Restructuring |
|
|
1 |
| Other risks |
|
1 |
79 |
| Total |
23 |
27 |
1,679 |
| € million |
31.12.2016 |
Changes in scope |
Additions |
Reversals, amounts used |
Reversals, amounts not used |
Translation adjustments |
| Home purchase schemes risks |
|
|
|
|
|
|
| Execution risks of commitments by signature |
46 |
|
200 |
(3) |
(13) |
(9) |
| Operational risks |
|
|
1 |
|
|
|
| Employee retirement and similar benefits |
669 |
|
38 |
(66) |
(20) |
(24) |
| Litigation |
576 |
|
288 |
(97) |
(157) |
(3) |
| Equity investments |
1 |
|
1 |
|
|
|
| Restructuring |
2 |
|
|
(1) |
|
|
| Other risks |
77 |
|
13 |
(34) |
(7) |
(1) |
| Total |
1,371 |
|
541 |
(201) |
(197) |
(37) |
| € million |
Other movements |
31.12.2017 |
| Home purchase schemes risks |
|
|
| Execution risks of commitments by signature |
|
221 |
| Operational risks |
|
1 |
| Employee retirement and similar benefits |
(43) |
554 |
| Litigation |
|
607 |
| Equity investments |
|
2 |
| Restructuring |
|
1 |
| Other risks |
|
48 |
| Total |
(43) |
1,434 |
TAX AUDITS
♦ Crédit Agricole
CIB Paris tax audit
After an audit of accounts covering years 2013, 2014 and 2015, adjustments were
carried
out on Crédit Agricole CIB as part of a proposed adjustment received at the end of
December 2018. Crédit Agricole CIB is challenging the proposed adjustments. A provision
has been recognised to cover the estimated risk.
♦ Merisma tax
audit
Merisma, a Crédit Agricole CIB subsidiary, consolidated by Crédit Agricole S.A.
Group
for tax purposes, has been the object of tax adjustment notices for the financial
years 2006 to 2010, plus surcharges for abuse of law.
Although still challenged, provisions have been set aside for the adjustments.
♦ Crédit Agricole
CIB Milan and London tax audit regarding transfer pricing
Following tax audits, Crédit Agricole CIB Milan received proposals for adjustments
for financial years 2005 to 2013 from the Italian tax authorities in the area of transfer
prices. Crédit Agricole CIB challenged the proposed adjustments. At the same time,
the case has been referred to the competent French-Italian authorities for all years.
A provision was recognised to cover the estimated risk.
♦ CLSA Liability
guarantee
In 2013 Crédit Agricole S.A. Group sold the CLSA entities to the Chinese group
CITICS.
Following tax adjustments made to some CLSA entities in India and the Philippines,
CITICS invoked the liability guarantee against Crédit Agricole S.A. Group. Reasoned
arguments have been submitted challenging the adjustments. A provision was recognised
to cover the estimated risk.
INQUIRIES AND
REQUESTS FOR INFORMATION FROM REGULATORS
The main files related to surveys and request Regulatory information are:
♦ Office of Foreign
Assets Control (OFAC)
In October 2015, Crédit Agricole S.A. and its subsidiary Crédit Agricole Corporate
and Investment Bank (Crédit Agricole CIB) reached agreements with the US and New York
authorities that had been conducting investigations regarding US dollar transactions
with countries subject to US economic sanctions. The events covered by this agreement
took place between 2003 and 2008.
Crédit Agricole CIB and Crédit Agricole S.A., which cooperated with the US and
New
York authorities in connection with their investigations, have agreed to pay a total
penalty amount of $787.3 million (i.e. €692.7 million). The payment of this penalty
has been allocated to the pre-existing reserve that had already been taken and, therefore,
has not affected the accounts for the second half of 2015.
The agreements with the Board of Governors of the Federal Reserve System (Fed)
and
the New-York State Department of Financial Services (NYDFS) are with Crédit Agricole
S.A. and Crédit Agricole CIB. The agreement with the Office of Foreign Assets Control
(OFAC) of the US Department of the Treasury is with Crédit Agricole CIB. Crédit Agricole
CIB also entered into separate deferred prosecution agreements (DPAs) with the United
States Attorney's Office for the District of Columbia (USAO) and the District Attorney
of the County of New York (DANY), the terms of which are three years. On October 19,
2018 the two deferred prosecution agreements with USAO and DANY ended at the end of
the three year period, Crédit Agricole CIB having complied with all its obligations
under the DPAs.
Crédit Agricole continues to strengthen its internal procedures and its compliance
programs regarding laws on international sanctions and will continue to cooperate
fully with the US and New York authorities with its home regulators, the European
Central Bank and the French Regulatory and Resolution Supervisory Authority (ACPR),
and with the other regulators across its worldwide network.
Pursuant to the agreements with NYDFS and the US Federal Reserve, Crédit Agricole's
compliance program is subject to regular reviews to evaluate its effectiveness, including
a review by an independent consultant appointed by NYDFS for a term of one year and
annual reviews by an independent consultant approved by the Federal Reserve.
♦ Euribor/Libor
and other indexes
Crédit Agricole S.A. and its subsidiary Crédit Agricole CIB, in their capacity
as
contributors to a number of interbank rates, have received requests for information
from a number of authorities as part of investigations into: (i) the calculation of
the Libor (London Interbank Offered Rates) in a number of currencies, the Euribor
(Euro Interbank Offered Rate) and certain other market indices; and (ii) transactions
connected with these rates and indices. These demands covered several periods from
2005 to 2012.
As part of its cooperation with the authorities, Crédit Agricole S.A. and its subsidiary
Crédit Agricole CIB carried out investigations in order to gather the information
requested by the various authorities and in particular the American authorities -
the DOJ (Department of Justice) and CFTC (Commodity Future Trading Commission) -with
which they are in discussions. It is currently not possible to know the outcome of
these discussions, nor the date when they will be concluded.
Furthermore, Crédit Agricole CIB is currently under investigation opened by the
Attorney
General of the State of Florida on both the Libor and the Euribor.
Following its investigation and an unsuccessful settlement procedure, on 21 May
2014,
the European Commission sent a notification of grievances to Crédit Agricole S.A.
and to Crédit Agricole CIB pertaining to agreements or concerted practices for the
purpose and/or effect of preventing, restricting or distorting competition in derivatives
related to the Euribor.
In a decision dated 7 December 2016, the European Commission jointly fined Crédit
Agricole S.A. and Crédit Agricole CIB €114,654,000 for participating in a cartel in
euro interest rate derivatives. Crédit Agricole S.A. and Crédit Agricole CIB are challenging
this decision and have asked the European Court of Justice to overturn it.
Additionally, the Swiss competition authority, COMCO, is conducting an investigation
into the market for interest rate derivatives, including the Euribor, with regard
to Crédit Agricole S.A. and several Swiss and international banks. Moreover, in June
2016 the South Korean competition authority (KFTC) decided to close the investigation
launched in September 2015 into Crédit Agricole CIB and the Libor index on various
currencies, Euribor and Tibor indices. The investigation into certain foreign exchange
derivatives (ABS-NDF) has been closed by the KFTC according to a decision notified
to Crédit Agricole CIB on 20 December 2018.
Concerning the two class actions in the United States of America in which Crédit
Agricole
S.A. and Crédit Agricole CIB have been named since 2012 and 2013 along with other
financial institutions, both as defendants in one ("Sullivan" for the Euribor) and
only Crédit Agricole S.A. as defendant for the other ("Lieberman" for Libor), the
"Lieberman" class action is at the preliminary stage that consists in the examination
of its admissibility; proceedings are still suspended before the US District Court
of New York State. Concerning the"Sullivan" class action, Crédit Agricole S.A. and
Crédit Agricole CIB introduced a motion to dismiss the applicants' claim. The US District
Court of New York State upheld the motion to dismiss regarding Crédit Agricole S.A.
and Crédit Agricole CIB in first instance. This decision is subject to appeal.
Since 1 July 2016, Crédit Agricole S.A. and Crédit Agricole CIB, together with
other
banks, are also party to a new class action suit in the United States ("Frontpoint")
relating to the SIBOR (Singapore Interbank Offered Rate) and SOR (Singapore Swap Offer
Rate) indices. After having granted a first motion to dismiss filed by Crédit Agricole
S.A. and Crédit Agricole CIB, the New York Federal District Court, ruling on a new
request by the plaintiffs, excluded Crédit Agricole S.A. from the Frontpoint case
on the grounds that it had not contributed to the relevant indexes. The Court considered,
however, taking into account recent developments in case law, that its jurisdiction
could apply to Crédit Agricole CIB, as well as to all the banks that are members of
the SIBOR index panel. The allegations contained in the complaint regarding the SIBOR/
USD index and the SOR index were also rejected by the court, therefore the index SIBOR/Singapore
dollar alone is still taken into account. On 26 December, the plaintiffs filed a new
complaint aimed at reintroducing into the scope of the Frontpoint case the alleged
manipulations of the SIBOR and SOR indexes that affected the transactions in US dollars.
Crédit Agricole CIB, alongside the other defendants, will oppose the terms of this
new complaint and has also filed a new motion to dismiss to contest the jurisdiction
maintained against it
These class actions are civil actions in which the plaintiffs claim that they are
victims of the methods used to set the Euribor, Libor, SIBOR and SOR rates, and seek
repayment of the sums they allege were unlawfully received, as well as damages and
reimbursement of costs and fees paid.
♦ Banque Saudi
Fransi
Crédit Agricole Corporate Investment Bank (Crédit Agricole CIB) has received a
Request
for Arbitration submitted by Banque Saudi Fransi (BSF) before the International Chamber
of Commerce (ICC). The dispute relates to the performance of a Technical Services
Agreement between BSF and Crédit Agricole CIB that is no longer in force. On 7 August
2018, BSF quantified its claim at SAR 1,012 million, the equivalent of about €232
million and reserved the right to submit additional claims. Crédit Agricole CIB totally
denies BSF's allegations and claim.
♦ Bonds SSA
Several regulators have demanded information to Crédit Agricole S.A. and to Crédit
Agricole CIB for inquiries relating to activities of different banks involved in the
secondary trading of Bonds SSA (Supranational, Sub-Sovereign and Agencies) denominated
in American dollars. Through the cooperation with these regulators, Crédit Agricole
CIB proceeded to internal inquiries to gather the required information available.
On 20 December 2018, the European Commission issued a Statement of Objections to a
number of banks including Crédit Agricole S.A. and Crédit Agricole CIB within its
inquiry on a possible infringement of rules of European Competition law in the secondary
trading of Bonds SSA denominated in American dollars. Crédit Agricole S.A. and Crédit
Agricole CIB became aware of these objections and will issue a response. Crédit Agricole
CIB is included with other banks in a putative consolidated class action before the
United States District Court for the Southern District of New York. That action was
dismissed on 29 August 2018 on the basis that the plaintiffs failed to allege an injury
sufficient to give them standing. However the plaintiffs have been given an opportunity
to attempt to remedy that defect. The plaintiffs filed an amended complaint on 7 November
2018. Crédit Agricole CIB as well as the other defendants have filed motions to dismiss
the amended complaint.
On 7 February 2019, another class action was filed against Crédit Agricole CIB
and
the other defendants named in the class action already pending before the United States
District Court for the Southern District of New York.
On 11 July 2018, Crédit Agricole S.A. and Crédit Agricole CIB were notified with
other
banks of a class action filed in Canada, before the Ontario Superior Court of Justice.
Another class action, not notified to date, would have been filed before the Federal
Court of Canada. It is not possible at this stage to predict the outcome of these
investigations, proceedings or class actions or the date on which they will end.
♦ O'Sullivan and
Tavera
On November 9, 2017, a group of individuals, (or their families or estates), who
claimed
to have been injured or killed in attacks in Iraq filed a complaint ("O'Sullivan I")
against several banks including Crédit Agricole S.A., and its subsidiary Crédit Agricole
Corporate Investment Bank (Crédit Agricole CIB), in US Federal District Court in New
York.
On December 29, 2018, the same group of individuals, together with 57 new plaintiffs,
filed a separate action ("O'Sullivan II") against the same defendants.
On December 21, 2018, a different group of individuals filed a complaint ("Tavera")
against the same defendants.
All three complaints allege that Crédit Agricole S.A., Crédit Agricole CIB, and
other
defendants conspired with Iran and its agents to violate US sanctions and engage in
transactions with Iranian entities in violation of the US Anti-Terrorism Act and the
Justice Against Sponsors of Terrorism Act. Specifically, the complaints allege that
Crédit Agricole S.A., Crédit Agricole CIB, and other defendants processed US dollar
transactions on behalf of Iran and Iranian entities in violation of sanctions administered
by the US Treasury Department's Office of Foreign Assets Control, which allegedly
enabled Iran to fund terrorist organizations that, as is alleged, attacked plaintiffs.
The plaintiffs are seeking an unspecified amount of compensatory damages.
On 2 March 2018, Crédit Agricole CIB and other defendants filed a motion to dismiss
the O' Sullivan I Complaint.
♦ Intercontinental
Exchange, Inc. ("ICE")
On January 15, 2019 a class action was filed before a federal court in New-York
(US
District Court Southern District of New-York) against the Intercontinental Exchange,
Inc. ("ICE") and a number of banks including Crédit Agricole S.A., Crédit Agricole
CIB and Crédit Agricole Securities-USA. This action has been filed by plaintiffs who
allege that they have invested in financial instruments indexed to the USD ICE LIBOR.
They accuse the banks of having collusively set the index USD ICE LIBOR at artificially
low levels since February 2014 and made thus illegal profits.
On January 31, 2019 a similar action has been filed before the US District Court
Southern
District of New-York, against a number of banks including Crédit Agricole S.A., Crédit
Agricole CIB and Crédit Agricole Securities-USA. On February 1, 2019, these two class
actions were consolidated for pre-trial purposes.
♦ Binding agreements
Crédit Agricole S.A. does not depend on any industrial, commercial or financial
patent,
license or contract.
6.16 Subordinated
debt
| € million |
31.12.2018 |
31.12.2017 |
| Dated subordinated debt |
2,989 |
2,670 |
| Undated subordinated debt |
1,970 |
2,478 |
| Carrying amount |
4,959 |
5,148 |
SUBORDINATED DEBT
ISSUES
The issue of subordinated debt plays a part in regulatory capital management while
contributing to refinancing all of Crédit Agricole CIB's operations.
The Capital Requirements Regulation and Directive (CRD 4/CRR) define the conditions
under which subordinated instruments qualify as regulatory capital and set out the
terms and conditions of progressive disqualification between 1 January 2014 (effective
date of CRD 4 and CRR) and 1 January 2022 of older instruments that do not meet these
requirements.
All subordinated debt issuance, whether new or old, is likely to be subject to
bail-in
in certain circumstances, particularly in the event of resolution of the issuing bank,
in accordance with the Order of 20 August 2015 containing various provisions adapting
French legislation to EU law on financial matters, transposing the EU Directive of
15 May 2014 establishing a framework for the recovery and resolution of credit institutions
and investment firms (the Recovery and Resolution Directive, or RRD).
6.17 Equity
OWNERSHIP STRUCTURE
AT 31 DECEMBER 2018
At 31 December 2018, ownership of the capital and voting rights was as follows:
|
|
At 31 December |
|
|
2018 |
2017 |
2016 |
| Crédit Agricole CIB's shareholders |
Number of shares |
% of the share capital |
% of voting rights |
% of the share capital |
% of the share capital |
| Crédit Agricole S.A. |
283,037,778 |
97% |
97% |
97% |
97% |
| SACAM développement (1) |
6,485,666 |
2% |
2% |
2% |
2% |
| Delfinances (2) |
1,277,888 |
0% |
0% |
0% |
0% |
| Public |
14 |
ns |
ns |
ns |
ns |
| Total |
290,801,346 |
100% |
100% |
100% |
100% |
(1)
Owned by Crédit Agricole Group.
(2)
Owned by Crédit Agricole S.A. Group.
At 31 December 2018, Crédit Agricole CIB's share capital stood at 7,851,636,342
euros
divided into 290,801,346 fully paid up ordinary shares each with a par value of €27.
EARNING PER SHARE
|
|
|
31.12.2018 |
31.12.2017 |
| Net income Group share during the period |
(€ million) |
1,479 |
1,156 |
| Net income attributable to undated deeply subordinated
securities |
(€ million) |
(190) |
(170) |
| Net income attributable to holders of ordinary shares |
(€ million) |
1,290 |
986 |
| Weighted average number of ordinary shares in circulation
during the period |
|
290,801,346 |
290,801,346 |
| Weighted average number of ordinary shares for calculation
of diluted earnings per
share
|
|
290,801,346 |
290,801,346 |
| Basic earnings per share |
(in euros) |
4.44 |
3.39 |
| Basic earnings per share from ongoing activities |
(in euros) |
4.44 |
3.39 |
| Basic earnings per share from discontinued operations |
(in euros) |
|
|
| Diluted earnings per share |
(in euros) |
4.44 |
3.39 |
| Diluted earnings per share from ongoing activities |
(in euros) |
4.44 |
3.39 |
| Diluted earnings per share from discontinued operations |
(in euros) |
|
|
Net income attributable to subordinated and deeply subordinated securities corresponds
to the issuance costs and interest accrued on subordinated and deeply subordinated
Additional Tier 1 bond issues. The amount is -€190 million for the 2018 financial
year.
DIVIDENDS
The dividend distribution policy, defined by the Board of Directors, is based on
an
analysis which takes account in particular of historical dividends, the financial
position, and the results of the company.
The Board of Directors may propose in General Shareholder Meetings that part of
distributable
earnings be retained or appropriated to one or more reserve accounts. These reserves
may receive any appropriations decided by the General Meeting, on the proposal of
the Board of Directors, in particular with a view to the amortisation or reduction
of the capital through the reimbursement or purchase of shares.
The balance of distributable earnings is attributed to shareholders in proportion
to their shareholding in the Company as a dividend distribution.
In addition, the General Shareholder Meeting may decide to distribute sums deducted
from distributable reserves.
However, excluding the case of a capital reduction, no distribution may be made
to
shareholders when shareholders' equity is, or would become following the distribution,
less than the amount of the share capital increased by reserves prohibited from distribution
by applicable laws.
The conditions for dividend payment approved by the General Shareholder Meeting
are
set by the latter or failing that, by the Board of Directors, and the payment must
occur within the time period prescribed by the laws and regulations in force.
The General Shareholder Meeting called to approve the accounts for the year may
grant
to each shareholder, for all or part of the dividend being distributed, or for the
interim dividends, a choice between payment of the final or interim dividends in cash
or in shares.
| Dividend paid in respect of year |
Net amount in € million |
Number of shares receiving dividend |
Dividend per share |
| 2014 |
1,000 |
268,687,973 |
(1) 3.72
|
|
|
|
Interim: 268,687,973 |
Interim: (1) 2.93
|
| 2015 |
899 |
Remaining balance: 271,374,853 |
Remaining balance: (1) 0.41
|
|
|
|
|
Total: (1) 3.34
|
| 2016 |
983 |
Interim: 290,801,346 |
Interim: (1) 2.55
|
|
|
|
Remaining balance: 290,801,346 |
Remaining balance: (1) 0.83
|
|
|
|
|
Total: (1) 3.38
|
| 2017 |
1,236 |
290,801,346 |
(1) 4.25
|
| 2018 |
489 |
290,801,346 |
(1) 1.68
|
(1)
Dividend eligible for the discount defined in Article 158-3-2 of the French General
Tax Code for individual shareholders domiciled in France.
For the 2018 financial year, the Board of Directors proposed to submit for approval
to the General Meeting of Shareholders the distribution of €488,546,261.28.
APPROPRIATION
OF NET INCOME AND DETERMINATION OF THE 2018 DIVIDEND
The proposed appropriation of net income is set out in the draft resolutions to
be
presented by the Board of Directors at Crédit Agricole CIB's General Meeting on 7
May 2018. The breakdown of appropriation is described below. The net income for the
financial year ended 31 December 2018 amounts to € 1.272.001.927,45. The Board of
Directors proposes that the General Meeting of Shareholders agree:
► Proposal for
appropriation of net income (in euros):
| Amount of net income at 31/12/2018 |
1,272,001,927.45 |
| Appropriation of the net income at 31/12/2018 |
|
| to the legal reserve for (the legal reserve is thus 10%
of the share capital) |
17,096,127.88 |
| to a special reserve (Art 238 bis AB paragraph 5 of the
French general tax code) for |
77,988.00 |
| Balance of net income at 31/12/2018 after appropriation
to reserves |
1,254,827,811.57 |
| Amount of retained earnings at 31/12/2018 (1) |
2,447,169,123.36 |
| Amount of distributable earnings |
3,701,996,934.93 |
| Distribution of the dividend deducted from balance of
net income at 31/12/2018 after
appropriation to reserves
|
488,546,261.28 |
| Appropriation to retained earnings of the balance of
net income after distribution
of the dividend for
|
766,281,550.29 |
(1)
Crédit Agricole CIB's retained earnings were positively impacted by €33,475,712.38
at 01/01/2018 following the transposition of the IFRS 9 provisioning model, used within
the Crédit Agricole Group, into French accounting standards. This model involves impairment
of performing loans according to the estimate of the expected credit losses and represents
a change in accounting method.
UNDATED SUBORDINATED
AND DEEPLY SUBORDINATED DEBT
The main issues of undated subordinated and deeply subordinated debt classified
in
shareholders' equity Group share are:
|
|
|
31.12.2018 |
| Issue date |
Currency |
Amount in currency at 31 December
2017 (in million of units)
|
Partial repurchases and redemptions (in
million of units)
|
Amount in currency at 31 December
2018 (in million of units)
|
Amount in euros at inception rate (in
million of euros)
|
Interests paid Group share (in
million of euros)
|
| 16/11/2015 |
EUR |
1,800 |
|
1,800 |
1,800 |
(116) |
| 09/06/2016 |
USD |
500 |
|
720 |
635 |
(56) |
| 25/06/2018 |
EUR |
|
|
500 |
500 |
(13) |
| 19/09/2018 |
EUR |
|
|
500 |
500 |
(6) |
| Total |
|
|
|
|
3,435 |
(190) |
|
|
31.12.2018 |
| Issue date |
Issuance costs net of taxes (in
million of euros)
|
Shareholders' equity Group share
(in million of euros)
|
| 16/11/2015 |
|
|
| 09/06/2016 |
|
|
| 25/06/2018 |
|
|
| 19/09/2018 |
|
|
| Total |
|
|
The main issues of undated subordinated and deeply subordinated debt classified
in
shareholders' equity Group share are:
| € million |
31.12.2018 |
31.12.2017 |
| Undated deeply subordinated notes |
|
|
| Interest paid accounted as reserves |
(190) |
(170) |
| Evolution of nominals |
|
|
| Income tax savings related to interest paid to security
holders recognised in net
income
|
|
|
| Issuance costs (net of tax) accounted as reserves |
|
|
| Others |
|
|
| Undated subordinated notes |
|
|
| Interest paid accounted as reserves |
|
|
| Evolution of nominals |
|
|
| Income tax savings related to interest paid to security
holders recognised in net
income
|
|
|
| Issuance costs (net of tax) accounted as reserves |
|
|
| Others |
|
|
6.18 Non-controlling
interests
Non-controlling interests held by Crédit Agricole CIB are insignificant, except
the
Saudi Fransi Bank stake.
6.19 Breakdown
of financial assets and financial liabilities by contractual maturity
The breakdown of balance sheet financial assets and liabilities is made according
to contractual maturity date.
The maturities of derivative instruments held for trading and for hedging correspond
to their date of contractual maturity.
Equities and other variable-income securities are by nature without maturity; they
are classified as "Indefinite".
The revaluation adjustments on interest rate-hedged portfolios are considered to
have
an indefinite maturity, given the absence of defined maturity.
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months up to ≤ 1 year |
>1 year up to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Cash, central banks |
46,538 |
|
|
|
|
46,538 |
| Financial assets at fair value through profit or loss |
104,616 |
28,257 |
39,831 |
65,103 |
2,967 |
240,774 |
| Hedging derivative Instruments |
836 |
28 |
73 |
28 |
|
965 |
| Financial assets at fair value through other comprehensive
income |
2,126 |
2,235 |
4,272 |
1,067 |
1,662 |
11,362 |
| Financial assets at amortised cost |
69,049 |
26,765 |
58,204 |
27,099 |
253 |
181,371 |
| Revaluation adjustment on interest rate hedged portfolios |
2 |
|
|
|
|
2 |
| Total financial assets by maturity |
223,167 |
57,285 |
102,380 |
93,297 |
4,882 |
481,012 |
| Central banks |
877 |
|
|
|
|
877 |
| Financial liabilities at fair value through profit or
loss |
93,717 |
14,269 |
49,679 |
77,218 |
(4) |
234,880 |
| Hedging derivative Instruments |
927 |
46 |
61 |
34 |
|
1,067 |
| Financial liabilities at amortised cost |
162,900 |
30,083 |
23,720 |
5,656 |
(6) |
222,353 |
| Subordinated debt |
1 |
|
|
4,888 |
70 |
4,959 |
| Revaluation adjustment on interest rate hedged portfolios |
5 |
|
|
|
|
5 |
| Total financial liabilities by maturity |
258,427 |
44,398 |
73,460 |
87,796 |
60 |
464,141 |
|
|
31.12.2017 |
| € million |
≤ 3 months |
>3 months up to ≤ 1 year |
>1 year up to ≤ 5 years |
>5 years |
Indefinite |
Total |
| Cash, central banks |
32,604 |
|
|
|
|
32,604 |
| Financial assets at fair value through profit or loss |
97,893 |
24,168 |
40,622 |
70,833 |
3,485 |
237,001 |
| Hedging derivative instruments |
1,005 |
63 |
26 |
7 |
|
1,101 |
| Available-for-sale financial assets |
6,458 |
7,678 |
8,441 |
3,176 |
1,551 |
27,304 |
| Loans ad receivables due from credit institutions |
12,952 |
8,996 |
2,303 |
2,018 |
|
26,269 |
| Loans and receivables due from customers |
54,536 |
14,417 |
45,649 |
20,437 |
|
135,039 |
| Value adjustment on interest rate risk hedged portfolios |
17 |
|
|
|
|
17 |
| Held-to-maturity financial assets |
|
|
|
|
|
|
| Total financial assets by maturity |
205,465 |
55,322 |
97,041 |
96,471 |
5,036 |
459,335 |
| Central banks |
1,585 |
|
|
|
|
1,585 |
| Financial liabilities at fair value through profit or
loss |
84,672 |
17,380 |
51,032 |
84,087 |
|
237,171 |
| Hedging derivative instruments |
900 |
61 |
42 |
2 |
|
1,005 |
| Due to credit institutions |
18,702 |
7,223 |
13,966 |
4,111 |
|
44,002 |
| Due to customers |
101,278 |
4,383 |
967 |
332 |
|
106,960 |
| Debt securities |
37,051 |
9,424 |
884 |
616 |
2 |
47,977 |
| Subordinated debt |
1 |
|
|
5,147 |
|
5,148 |
| Value adjustment on interest rate risk hedged portfolios |
27 |
|
|
|
|
27 |
| Total financial liabilities by maturity |
244,216 |
38,471 |
66,891 |
94,295 |
2 |
443,875 |
NOTE 7: EMPLOYEE
BENEFITS AND OTHER COMPENSATION
7.1 Analysis of
employee expenses
| € million |
31.12.2018 |
31.12.2017 |
| Salaries (1) |
(1,550) |
(1,459) |
| Contributions to defined-contribution plans |
(74) |
(63) |
| Contributions to defined-benefit plans |
(29) |
(32) |
| Other social security expenses |
(335) |
(310) |
| Profit-sharing and incentive plans |
(32) |
(29) |
| Payroll-related tax |
(49) |
(46) |
| Total employee expenses |
(2,069) |
(1,939) |
(1)
Including expenses relating to stock option plans for €58 million at 31 December 2018
compared to €56 million at 31 December 2017.
7.2 Average headcount
| Average headcount |
31.12.2018 |
31.12.2017 |
| France |
4,903 |
4,414 |
| International |
6,448 |
5,949 |
| Total |
11,351 |
10,363 |
7.3 Post-employment
benefits, defined contribution plans
There are various mandatory pension plans to which employers contribute. The funds
are managed by independent organisations and the contributing companies have no legal
or implied obligation to pay additional contributions if the funds do not have sufficient
assets to provide all the benefits corresponding to the services rendered by staff
during the current and previous years. As a consequence, Crédit Agricole CIB has no
liability in this respect other than the contributions to be paid.
Within Crédit Agricole CIB, there are several compulsory defined-contribution plans,
the main ones being Agirc/Arrco, which are French supplementary retirement plans,
notably supplemented by an "Article 83" type plan.
7.4 Post-employment
benefits, defined-benefit plans
CHANGE IN ACTUARIAL
LIABILITY
|
|
31.12.2018 |
31.12.2017 |
| € million |
Eurozone |
Outside Eurozone |
All Zones |
All Zones |
| Actuarial liability at 31.12.2017 |
238 |
1,487 |
1,725 |
1,851 |
| Translation adjustments |
|
28 |
28 |
(108) |
| Cost of service rended during the period |
11 |
32 |
43 |
45 |
| Financial cost |
3 |
25 |
28 |
30 |
| Employee contributions |
|
16 |
16 |
13 |
| Benefit plan changes, withdrawals and settlement |
(1) |
4 |
3 |
(19) |
| Changes in scope |
7 |
|
7 |
|
| Benefits paid (mandatory) |
(9) |
(62) |
(71) |
(102) |
| Taxes, administrative expenses, and bonuses |
|
|
|
|
| Actuarial (gains)/losses arising from changes in demographic
assumptions |
8 |
(13) |
(5) |
(15) |
| Actuarial (gains)/losses arising from changes in financial
assumptions |
|
(57) |
(57) |
30 |
| Actuarial liability at 31.12.2018 |
257 |
1,460 |
1,716 |
1,725 |
BREAKDOWN OF NET
CHARGE RECOGNISED IN THE INCOME STATEMENT
|
|
31.12.2018 |
31.12.2017 |
| € million |
Eurozone |
Outside Eurozone |
All Zones |
All Zones |
| Service cost |
11 |
35 |
46 |
26 |
| Income/expenses on net interests |
3 |
3 |
6 |
6 |
| Impact in profit and loss at 31.12.2018 |
14 |
38 |
52 |
32 |
BREAKDOWN OF NET
GAINS AND LOSSES RECOGNISED DIRECTLY IN EQUITY (NON-RECYCLABLE)
|
|
31.12.2018 |
31.12.2017 |
| € million |
Eurozone |
Outside Eurozone |
All Zones |
All Zones |
| Revaluation from net liabilities (from net assets) |
|
|
|
|
| Total amount of actuarial gains or losses recognised
in other comprehensive income
that will not be reclassified to profit and loss at 31.12.2017
|
104 |
313 |
417 |
452 |
| Translation adjustments |
|
7 |
7 |
(24) |
| Actuarial gains/losses on assets |
|
6 |
6 |
(58) |
| Actuarial (gains)/losses arising from changes in demographic
assumptions |
|
(13) |
(6) |
(15) |
| Actuarial (gains)/losses arising from changes in financial
assumptions |
|
|
(57) |
30 |
| Adjustment of assets restriction's impact |
|
|
|
|
| Impact in other comprehensive income at 31.12.2018 |
7 |
(57) |
(50) |
(67) |
CHANGE IN FAIR
VALUE OF ASSETS
|
|
31.12.2018 |
31.12.2017 |
| € million |
Eurozone |
Outside Eurozone |
All Zones |
All Zones |
| Fair value of assets at 31.12.2017 |
16 |
1,246 |
1,262 |
1,296 |
| Translation adjustments |
|
20 |
20 |
(85) |
| Interests on asset (income) |
|
22 |
22 |
23 |
| Actuarial gains/(losses) |
|
(5) |
(5) |
58 |
| Employer contributions |
|
57 |
57 |
32 |
| Employee contributions |
|
16 |
16 |
13 |
| Benefit plan changes, withdrawals and settlement |
|
|
|
|
| Changes in scope |
|
|
|
|
| Taxes, administrative expenses, and bonuses |
|
|
|
|
| Benefits paid out under the benefit plan |
(1) |
(61) |
(62) |
(75) |
| Fair value of assets at 31.12.2018 |
15 |
1,295 |
1,310 |
1,262 |
NET POSITION
|
|
31.12.2018 |
31.12.2017 |
| € million |
Eurozone |
Outside Eurozone |
All Zones |
All Zones |
| Closing actuarial liability |
257 |
1,460 |
1,717 |
(1,725) |
| Impact of asset restriction |
|
|
|
|
| Fair value of assets at end of period |
(16) |
(1,296) |
(1,312) |
1,263 |
| Net position of assets/(liabilities) at end of period |
241 |
164 |
405 |
(462) |
DEFINED-BENEFIT
PLANS: MAIN ACTUARIAL ASSUMPTIONS
|
|
31.12.2018 |
31.12.2017 |
| € million |
Eurozone |
Outside Eurozone |
Eurozone |
Outside Eurozone |
| Discount rate (1) |
1.43% |
1.90% |
1.38% |
1.69% |
| Actual return on plan assets and on reimbursement rights |
2.28% |
1.35% |
8.82% |
6.56% |
| Expected salary increase rates (2) |
2.85% |
2.11% |
2.86% |
2.10% |
| Rate of change in medical costs |
4.60% |
na |
4.60% |
0.00% |
(1)
The discount rates are determined depending on the average period of the commitment,
meaning the arithmetic average of the periods calculated between the date of valuation
and the date of payment weighted by staff turnover assumptions. The underlying item
is the discount rate by reference to the iBoxx index.
(2)
Depending on the populations concerned (managers or non-managers).
INFORMATION OF
PLAN ASSETS: ALLOCATION OF ASSETS(1)
|
|
Eurozone |
Outside Eurozone |
| € million |
% |
Amount |
of which listed |
% |
Amount |
of which listed |
| Equities |
7.84% |
1,230 |
1,230 |
26.18% |
339,362 |
339,362 |
| Bonds |
63.88% |
10,024 |
10,024 |
48.21% |
624,853 |
624,855 |
| Property/Real estate |
4.65% |
730 |
|
11.80% |
153,003 |
|
| Other assets |
23.63% |
3,709 |
|
13.81% |
178,988 |
|
|
|
All Zones |
| € million |
% |
Amount |
of which listed |
| Equities |
25.96% |
340,592 |
340,592 |
| Bonds |
48.39% |
634,877 |
634,879 |
| Property/Real estate |
11.72% |
153,733 |
|
| Other assets |
13.93% |
182,697 |
|
Crédit Agricole CIB's policy on covering employee benefit obligations reflects
local
rules on funding post-employment benefits in countries with minimum funding requirements.
Overall, Crédit Agricole CIB covered 76.39% of its employee benefit obligations
at
31 December 2018.
At 31 December 2018, the sensitivity analysis showed that:
| ― |
a 50 basis point increase in discount rates would reduce the
commitment by -7.61%;
|
| ― |
a 50 basis point decrease in discount rates would increase the
commitment by 8.66%.
|
(1)
Of which fair value of reimbursement rights.
7.5 Other employee
benefits
Crédit Agricole CIB pays long service awards.
7.6 Share-based
payments
7.6.1 STOCK OPTION
PLAN
No new plan was implemented in 2018.
EMPLOYEE BONUS
SHARE PLAN
No new plans were implemented in 2018.
CAPITAL INCREASE
RESERVED FOR EMPLOYEES AND PENSIONERS OF THE CRÉDIT AGRICOLE GROUP
In 2018, Crédit Agricole S.A. offered employees and Group retirees the possibility
of subscribing to a new capital increase reserved for them. This transaction, launched
in France and 11 other countries, enabled over 18,589 subscribers worldwide to invest
in Crédit Agricole group shares.
At the end of 2018, the percentage of share capital owned by employees and former
employees of the Crédit Agricole S.A. Group was 4.4%.
DEFERRED VARIABLE
COMPENSATION PAID IN SHARES OR IN CASH INDEXED TO THE SHARE PRICE
The deferred variable compensation plans implemented by the Crédit Agricole CIB
Group
in respect of 2018 are settled in cash indexed to the Crédit Agricole S.A. share price.
This deferred variable compensation is subject to continued employment and performance
conditions. It is broken down into thirds which are payable in March 2020, March 2021
and March 2022. The expense related to these plans is recognised in compensation expenses.
It is spread on a straight-line basis over the vesting period to reflect continued
employment, and a liability is recorded in employee expenses, the amount of which
is subject to periodical revaluation through profit or loss until the settlement date,
depending on the evolution of the Crédit Agricole S.A. share price and the vesting
conditions (presence and performance conditions).
7.7 Executive
compensation
Top Executives of Crédit Agricole CIB include all members of the Executive Committee
and members of the Board of Directors of Crédit Agricole CIB.
The composition of the Executive Committee is detailed in the Corporate Governance
chapter of this document.
The compensation paid and benefits granted to the members of the Executive Committee
in 2018 were as follows:
| ― |
short-term benefits: €18.1 million for fixed and variable compensation
(of which €3.08
million paid in share-indexed instruments), including social security expenses and
benefits in kind;
|
| ― |
post-employment benefits at 31 December 2018: €18.5 million for
end-of-career benefit
commitments and the supplementary pension scheme put in place for the Group's Senior
Executive Officers;
|
| ― |
other long-term benefits: the amount granted for long-term service
awards was not
material;
|
| ― |
employment contract termination benefits: no payments were made
in 2018 for termination
benefits;
|
| ― |
other share-based payment: not applicable.
|
Total Directors' fees paid to members of Crédit Agricole CIB's Board of Directors
in 2018 in consideration for serving as Directors of Crédit Agricole CIB amounted
to €0.42 million (net amount).
NOTE 8: COMMITMENTS
GIVEN AND RECEIVED AND OTHER GUARANTEES
Financing and guarantee commitments and other guarantees include discontinued operations.
COMMITMENTS GIVEN
AND RECEIVED
| € million |
31.12.2018 |
31.12.2017 |
| Commitments given |
186,638 |
168,034 |
| Financing commitments |
129,421 |
114,729 |
| Commitments given to credit institutions |
21,024 |
21,645 |
| Commitments given to customers |
108,397 |
93,084 |
| Confirmed credit lines |
92,653 |
86,309 |
| Documentary credits |
4,655 |
4,496 |
| Other confirmed credit lines |
87,998 |
81,813 |
| Other commitments given to customers |
15,744 |
6,775 |
| Guarantee commitments |
50,172 |
53,305 |
| Credit institutions |
7,248 |
6,429 |
| Confirmed documentary credit lines |
3,946 |
3,377 |
| Other |
3,302 |
3,052 |
| Customers |
42,924 |
46,876 |
| Property guarantees |
1,950 |
2,388 |
| Other customer guarantees |
40,974 |
44,488 |
| Securities commitments |
7,045 |
|
| Securities to be delivered |
7,045 |
|
| Commitments received |
172,776 |
126,468 |
| Financing commitments |
17,054 |
13,638 |
| Commitments received from credit institutions |
11,304 |
10,078 |
| Commitments received from customers |
5,750 |
3,560 |
| Guarantee commitments |
145,351 |
112,830 |
| Commitments received from credit institutions |
5,962 |
6,299 |
| Commitments received from customers |
139,389 |
106,531 |
| Guarantees received from government bodies or similar
institutions |
24,366 |
19,227 |
| Other guarantees received |
115,023 |
87,304 |
| Securities commitments |
10,371 |
|
| Securities to be received |
10,371 |
|
FINANCIAL INSTRUMENTS
GIVEN AND RECEIVED AS COLLATERAL
| € million |
31.12.2018 |
31.12.2017 |
| Carrying amount of financial assets provided as collateral
(including transferred
assets)
|
|
|
| Securities and receivables provided as collateral for
the refinancing structures (Banque
de France, CRH, etc.)
|
38,021 |
34,628 |
| Securities lent |
2,852 |
884 |
| Security deposits on market transactions |
17,536 |
18,565 |
| Other security deposits |
|
|
| Securities sold under repurchase agreements |
78,273 |
69,938 |
| Total carrying amount of financial assets provided as
collateral |
136,682 |
124,015 |
| Carrying amount of financial assets received in garantee |
|
|
| Other security deposits |
|
|
| Fair value of instruments received as reusable and reused
collateral |
|
|
| Securities borrowed |
3 |
7 |
| Securtities bought under repurchase agreements |
109,920 |
95,213 |
| Securities sold short |
29,368 |
22,594 |
| Total fair value of instruments received as reusable
and reused col-lateral |
139,291 |
117,814 |
RECEIVABLES PLEDGED
AS COLLATERAL
In 2018, Crédit Agricole CIB deposited €2,566 million of receivables to Banque
de
France for refinancing compared to €3,117 million in 2017.
At 31 December 2018, Crédit Agricole CIB used no refinancing lines from the Banque
de France.
GUARANTEES HELD
The majority of guarantees and enhancements held consists of mortgage lines, collateral
or guarantees received, regardless of the quality of the assets guaranteed.
The guarantees held by Crédit Agricole CIB Group which it is allowed to sell or
to
use as collateral, amounted to €139 billion at 31 December 2018 compared to €118 billion
at 31 December 2017. They are mainly related to repurchase agreements.
Crédit Agricole CIB policy is to sell seized collateral as soon as possible. Crédit
Agricole CIB had no such assets either at 31 December 2018, nor at 31 December 2017.
NOTE 9: RECLASSIFICATIONS
OF FINANCIAL INSTRUMENTS
Principles applied
by Crédit Agricole CIB
Reclassifications are performed only under exceptional circumstances and following
a decision by the Executive Management of Crédit Agricole CIB as a result of internal
or external changes: significant changes in the entity's activity.
Reclassification
performed by Crédit Agricole CIB
In 2018, Crédit Agricole CIB did not carry out any reclassification pursuant to
paragraph
4.4.1 of IFRS 9.
RECLASSIFICATION
OF FINANCIAL ASSETS DURING PRIOR FINANCIAL YEARS
During previous financial years Crédit Agricole CIB implemented reclassifications
as permitted by the amendment to IAS 39 published and adopted by the European Union
on 15 October 2008. Information about these reclassifications is provided below.
For assets reclassified at 31 December 2017, the table below presents their net
carrying
amount and their estimated market value:
|
|
Assets reclassified
before |
| € million |
Carrying amount 31.12.2017 |
Estimated market value at 31.12.2017 |
| Financial assets at fair value through profit or loss
reclassified as loans and receivables |
78 |
72 |
| Available-for-sale financial assets reclassified as loans
and receivables |
132 |
132 |
| Total reclassified assets |
210 |
204 |
CONTRIBUTION OF
ASSETS RECLASSIFIED TO PROFIT AND LOSS SINCE THE RECLASSIFICATION
DATE
The contribution of the assets transferred to profit and loss at 31 December 2017,
since the reclassification date, includes all gains, losses, income and expenses recognised
in profit or loss and/or in other comprehensive income.
Analysis of the impact of the transferred assets:
|
|
Assets reclassified
before |
|
|
Cumulative impact
at 31.12.2017 |
| € million |
Actual income and expenses recognised |
If asset had been retained in its
former category (change in fair value) |
| Financial assets at fair value through profit or loss
reclassified as loans and receivables |
(36) |
(122) |
| Available-for-sale financial assets reclassified as loans
and receivables |
21 |
21 |
| Total reclassified assets |
(15) |
(101) |
NOTE 10: FAIR
VALUE OF FINANCIAL INSTRUMENTS
Fair value is the price that would be received at the sale of an asset or paid
to
transfer a liability in an arm's length transaction between market participants at
the valuation date.
Fair value is defined on the basis of an exit price.
The fair values shown below are estimates made on the reporting date using observable
market data wherever possible. These are subject to change in subsequent periods due
to developments in market conditions or other factors.
The calculations represent best estimates. They are based on a number of assumptions.
It is assumed that market participants act in their best economic interest.
To the extent that these models contain uncertainties, the fair values shown may
not
be achieved upon actual sale or immediate settlement of the financial instruments
concerned.
The fair value hierarchy of financial assets and liabilities is broken down according
to the general observability criteria of the valuation inputs, pursuant to the principles
defined under IFRS 13.
Level 1 applies to the fair value of financial assets and liabilities quoted in
active
markets.
Level 2 applies to the fair value of financial assets and liabilities with observable
inputs. This includes, in particular, market data relating to interest rate risk or
credit risk when the latter can be
revalued based on Credit Default Swap (CDS) prices. Repurchase agreements with
underlying's
quoted in an active market are also included in level 2 of the hierarchy, as are financial
assets with a demand component for which fair value is measured at unadjusted amortised
cost.
Level 3 indicates the fair value of financial assets and liabilities with unobservable
inputs or for which some data can be revalued using internal models based on historical
data. This includes, in particular, market data relating to credit risk or early redemption
risk.
In some cases, market values are close to carrying amounts. This applies primarily
to:
| ― |
assets or liabilities at variable rates for which interest rate
changes do not have
a significant influence on the fair value, since the rates on these instruments frequently
adjust themselves to the market rates;
|
| ― |
short-term assets or liabilities where the redemption value is
considered to be close
to the market value;
|
| ― |
short-term assets or liabilities where the redemption value is
considered to be close
to the market value;
|
| ― |
demand assets or liabilities;
|
| ― |
transactions for which there are no reliable observable data.
|
10.1 Fair value
of financial assets and liabilities recognised at amortised cost
Amounts presented below include accruals and prepayments and are net of impairment.
FINANCIAL ASSETS
RECOGNISED AT COST AND MEASURED AT FAIR VALUE ON THE BALANCE SHEET
| € million |
Value at 31.12.2018 |
Estimated fair value at 31.12.2018 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial assets not measured at fair value on balance
sheet |
|
|
|
|
|
| Loans and receivables |
153,475 |
153,746 |
|
23,560 |
130,186 |
| Loans and receivables due from credit institutions |
19,172 |
19,162 |
|
18,854 |
308 |
| Current accounts and overnight loans |
3,503 |
3,503 |
|
3,503 |
|
| Accounts and long-term loans |
14,688 |
14,677 |
|
14,369 |
308 |
| Pledged securities |
|
|
|
|
|
| Securities bought under repurchase agreements |
969 |
971 |
|
971 |
|
| Subordinated loans |
|
|
|
|
|
| Other loans and receivables |
12 |
11 |
|
11 |
|
| Loans and receivables due from customers |
134,303 |
134,584 |
|
4,706 |
129,878 |
| Trade receivables |
21,717 |
21,735 |
|
|
21,735 |
| Other customer loans |
107,538 |
107,795 |
|
|
107,795 |
| Pledged securities |
|
|
|
|
|
| Securities bought under repurchase agreements |
336 |
336 |
|
336 |
|
| Subordinated loans |
99 |
99 |
|
|
99 |
| Advances in associates' current accounts |
137 |
137 |
|
|
137 |
| Current accounts in debit |
4,476 |
4,482 |
|
4,370 |
112 |
| Debt securities |
27,897 |
27,970 |
15,339 |
8,154 |
4,477 |
| Treasury bills and similar securities |
7,284 |
7,320 |
7,270 |
|
50 |
| Bonds and other fixed income securities |
20,613 |
20,650 |
8,069 |
8,154 |
4,427 |
| Total financial assets of which fair value is disclosed |
181,372 |
181,716 |
15,339 |
31,714 |
134,663 |
|
|
Value at 31.12.2017 |
Estimated fair value at 31.12.2017 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial assets not measured at fair value on balance
sheet |
|
|
|
|
|
| Loans and receivables |
161,308 |
161,193 |
|
34,534 |
126,659 |
| Loans and receivables due from credit institutions |
26,269 |
26,269 |
|
26,269 |
|
| Current accounts and overnight loans |
5,449 |
5,449 |
|
5,449 |
|
| Accounts and long-term loans |
20,094 |
20,094 |
|
20,094 |
|
| Pledged securities |
|
|
|
|
|
| Securities bought under repurchase agreements |
725 |
725 |
|
725 |
|
| Subordinated loans |
1 |
1 |
|
1 |
|
| Other loans and receivables |
|
|
|
|
|
| Loans and receivables due from customers |
135,039 |
134,924 |
|
8,265 |
126,659 |
| Trade receivables |
16,831 |
16,831 |
|
2,227 |
14,604 |
| Other customer loans |
97,864 |
97,749 |
|
461 |
97,288 |
| Pledged securities |
|
|
|
|
|
| Securities bought under repurchase agreements |
937 |
937 |
|
937 |
|
| Subordinated loans |
100 |
100 |
|
|
100 |
| Securities not listed on an active market |
14,552 |
14,552 |
|
|
14,552 |
| Advances in associates current accounts |
115 |
115 |
|
|
115 |
| Current accounts in debit |
4,640 |
4,640 |
|
4,640 |
|
| Debt securities |
|
|
|
|
|
| Treasury bills and similar securities |
|
|
|
|
|
| Bonds and other fixed Income securities |
|
|
|
|
|
| Total financial assets of which fair value is disclosed |
161,308 |
161,193 |
|
34,534 |
126,659 |
FINANCIAL LIABILITIES
RECOGNISED AT AMORTISED COST AND MEASURED AT FAIR VALUE ON THE
BALANCE SHEET
|
|
Value at 31.12.2018 |
Estimated fair value at 31.12.2018 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial liabilities not measured at fair value on balance
sheet |
|
|
|
|
|
| Due to credit institutions |
47,302 |
47,302 |
|
47,302 |
|
| Current accounts and overnight loans |
7,003 |
7,003 |
|
7,003 |
|
| Accounts and term deposits |
38,522 |
38,522 |
|
38,522 |
|
| Pledged securities |
|
|
|
|
|
| Securities sold under repurchase agreements |
1,777 |
1,777 |
|
1,777 |
|
| Due to customers |
123,510 |
123,510 |
|
123,357 |
153 |
| Current accounts in credit |
45,971 |
45,971 |
|
45,971 |
|
| Special savings accounts |
151 |
151 |
|
|
151 |
| Other amounts due to customers |
76,849 |
76,849 |
|
76,847 |
2 |
| Securities sold under repurchase agreements |
539 |
539 |
|
539 |
|
| Debt securities |
51,541 |
51,548 |
|
51,548 |
|
| Subordinated debt |
4,959 |
4,959 |
|
4,959 |
|
| Total financial liabilities of which fair value is disclosed |
227,312 |
227,319 |
|
227,166 |
153 |
|
|
Value at 31.12.2017 |
Estimated fair value at 31.12.2017 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial liabilities not measured at fair value on balance
sheet |
|
|
|
|
|
| Due to credit institutions |
44,002 |
44,002 |
|
44,002 |
|
| Current accounts and overnight loans |
4,356 |
4,356 |
|
4,356 |
|
| Pledged securities |
38,424 |
38,424 |
|
38,424 |
|
| Securities sold under repurchase agreements |
1,222 |
1,222 |
|
1,222 |
|
| Due to customers |
106,960 |
106,960 |
|
44,690 |
62,270 |
| Current accounts in credit |
40,114 |
40,114 |
|
35,189 |
4,925 |
| Special savings accounts |
150 |
150 |
|
|
150 |
| Other amounts due to customers |
65,335 |
65,335 |
|
8,140 |
57,195 |
| Securities sold under repurchase agreements |
1,361 |
1,361 |
|
1,361 |
|
| Debt securities |
47,977 |
47,976 |
|
47,976 |
|
| Subordinated debt |
5,148 |
5,148 |
|
5,148 |
|
| Total financial liabilities of which fair value is disclosed |
204,087 |
204,086 |
|
141,816 |
62,270 |
10.2 Information
about financial instruments measured at fair value
ASSESSMENT OF
THE COUNTERPARTY RISK ON DERIVATIVE INSTRUMENT ASSETS (CREDIT VALUATION
ADJUSTMENT OR CVA), OF THE RISK OF NON-EXECUTION ON DERIVATIVE LIABILITIES (DEBT VALUATION
ADJUSTMENT OR DVA OR OWN CREDIT RISK)
The adjustment of value in relation to the quality of the counterparty (Credit
Value
Adjustment - CVA) aims to include, in the valuation of derivative instruments, the
credit risk associated with the counterparty (risk of non-payment of sums due in the
event of default). This adjustment is calculated overall by counterparty according
to the profile of transaction future exposures, minus any collateral. This adjustment
is always negative and reduces the fair value assets of the financial instruments.
The adjustment in value relating to the own credit risk of our establishment (Debt
Value Adjustment - DVA) aims to incorporate into the valuation of the derivative instruments
the risk borne by our counterparties. This adjustment is calculated overall by counterparty
according to the profile of transaction future exposures. This adjustment is always
positive and reduces the fair value liability of the financial instruments.
The CVA/DVA is calculated on the basis of an estimate of expected losses based
on
the probability of default and loss given default. The methodology used maximises
the use of observable market inputs. The likelihood of default is worked out from
listed CDSs or proxy listed CDSs when they are considered to be sufficiently liquid.
♦ Valuation methods
Financial instruments are valued by management information systems and checked
by
a team that reports to the Risk Management Department and is independent from the
market operators.
Valuations are based on the use of:
| ― |
prices or inputs obtained from independent sources and/or validated
by the Market
Risk Department using a series of available sources such as pricing service vendors,
market consensus data and brokers;
|
| ― |
models validated by the Market Risks Department's quantitative
teams.
|
The valuation produced for each instrument is a mid-market valuation, which does
not
take into account the direction of the trade, the bank's aggregate exposure, market
liquidity or counterparty quality. Adjustments are then made to the market valuations
to incorporate those factors, as well as the potential uncertainties inherent in the
models or inputs used.
Valuations are based on the use of:
mark-to-market adjustments: these adjustments correct any potential variance between
the midmarket valuations of an instrument obtained using internal valuation models
and the associated inputs and the valuation obtained from external sources or market
consensus data. These adjustments can be positive or negative;
bid/ask reserves: these adjustments include the bid/ask spread for a given instrument
in order to reflect the price at which the position could be reversed. These adjustments
are always negative;
uncertainty reserves representing a risk premium as considered by any market participant.
These adjustments are always negative:
| ― |
reserves for parameters uncertainty incorporate any uncertainty
that may exist in
terms of on one or several parameters used,
|
| ― |
reserves for model uncertainty incorporate any uncertainty that
may exist because
of the choice of model used.
|
In addition, in accordance with IFRS 13 "Fair value measurement", Crédit Agricole
S.A. prices in to the fair value calculated for its OTC derivatives (i.e. those traded
over the counter) various adjustments linked to the default risk and credit quality
(Credit Valuation Adjustment, Debit Valuation Adjustment) and also to future funding
costs and benefits (Funding Valuation Adjustment).
CVA ADJUSTMENT
The Credit Valuation Adjustment (CVA) is a mark-to-market adjustment that aims
to
price into the value of the OTC derivatives the market value of the default risk (risk
that amounts due to us are not repaid in the event of default or deterioration in
creditworthiness) of our counterparties. This adjustment is calculated per counterparty
based on the positive future exposure profiles of the trading portfolio (taking into
account any netting or collateral agreements, where such exist) weighted by the probabilities
of default and losses incurred in the event of default. The methodology used maximises
the use of observable entry data (the probability of default is in priority, directly
deduced from listed CDS, listed CDS proxies, or other credit instruments when they
are judged sufficiently liquid). This adjustment is always negative and reduces the
fair value of the OTC derivative assets held in the portfolio.
DVA ADJUSTMENT
The Debit Valuation Adjustment (DVA) is a mark-to-market adjustment that aims to
price
into the value of fully collateralised OTC derivatives the market value of the own
default risk (potential losses to which Crédit Agricole S.A. may expose its counterparties
in the event of default or a deterioration in its creditworthiness). This adjustment
is calculated by type of collateral contract on the basis of future negative exposure
profiles of the trading portfolio weighted by probabilities of default (of Crédit
Agricole S.A.) and the losses incurred in the event of default. The calculation aims
to factor in the Margin Period of Risk (MPR, period of time between the occurrence
of the Crédit Agricole S.A. default and the effective liquidation of all positions).
The methodology used maximises the use of observable market inputs (use of the Crédit
Agricole S.A. CDS to determine probabilities of default). This adjustment is always
positive and reduces the fair value of the OTC derivative liabilities held in the
portfolio.
FVA ADJUSTMENT
The Funding Valuation Adjustment (FVA) is a mark-to-market adjustment that aims
to
price into the value of non-collateralised, or imperfectly collateralised OTC derivatives
the additional future funding costs and benefits based on Asset & Liabilities
Management
(ALM) costs. This adjustment is calculated by counterparty on the basis of future
exposure profiles of the trading portfolio (taking account of the netting agreements
and any collateral agreements) weighted by ALM funding spreads.
In the area of "cleared" derivatives, an FVA adjustment called IMVA (Initial Margin
Value Adjustment) is calculated in order to take account of the costs and benefits
of future funding of initial margins to be posted with the main clearing houses on
derivatives until the maturity of the portfolio.
BREAKDOWN OF FINANCIAL
INSTRUMENTS AT FAIR VALUE BY VALUATION MODEL
Amounts presented below include accruals and prepayments and are net of impairments.
► Financial assets
measured at fair value
| € million |
31.12.2018 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial assets held for trading |
240,560 |
24,825 |
211,402 |
4,333 |
| Loans and receivables due from credit institutions |
191 |
|
191 |
|
| Loans and receivables due from customers |
1,374 |
|
|
1,374 |
| Securities bought under repurchase agreements |
108,619 |
|
107,652 |
967 |
| Pledged securities |
|
|
|
|
| Held-for-trading securities |
22,224 |
19,583 |
2,149 |
492 |
| Treasury bills and similar securities |
14,116 |
12,127 |
1,544 |
445 |
| Bonds and other fixed income securities |
5,326 |
4,682 |
597 |
47 |
| Mutual funds |
5 |
|
5 |
|
| Equity and other variable income securities |
2,777 |
2,774 |
3 |
|
| Derivative instruments |
108,152 |
5,242 |
101,410 |
1,500 |
| Other financial instruments at fair value through profit
or loss |
214 |
27 |
16 |
171 |
| Equity instruments at fair value through profit or loss |
100 |
2 |
13 |
85 |
| Equity and other variable income securities |
31 |
2 |
13 |
16 |
| Non-consolidated equity investments |
69 |
|
|
69 |
| Debt instruments that do not meet the conditions of the
"SPPI" test |
114 |
25 |
3 |
86 |
| Loans and receivables due from credit institutions |
|
|
|
|
| Loans and receivables due from customers |
76 |
|
|
76 |
| Debt securities |
38 |
25 |
3 |
10 |
| Treasury bills and similar securities |
|
|
|
|
| Bonds and other fixed income securities |
30 |
20 |
|
10 |
| Mutual funds |
8 |
5 |
3 |
|
| Financial assets designated at fair value through profit
or loss |
|
|
|
|
| Loans and receivables due from credit institutions |
|
|
|
|
| Loans and receivables due from customers |
|
|
|
|
| Debt securities |
|
|
|
|
| Treasury bills and similar securities |
|
|
|
|
| Bonds and other fixed income securities |
|
|
|
|
| Financial assets designated at fair value through equity |
11,362 |
10,859 |
175 |
328 |
| Equity instruments designated at fair value through non-recyclable
equity |
1,662 |
1,406 |
|
256 |
| Equity and other variable income securities |
38 |
4 |
|
34 |
| Non-consolidated equity investments |
1,624 |
1,402 |
|
222 |
| Debt instruments at fair value through non-recyclable
equity |
9,700 |
9,453 |
175 |
72 |
| Loans and receivables due from credit institutions |
|
|
|
|
| Loans and receivables due from customers |
|
|
|
|
| Debt securities |
9,700 |
9,453 |
175 |
72 |
| Treasury bills and similar securities |
1,576 |
1,504 |
|
72 |
| Bonds and other fixed income securities |
8,124 |
7,949 |
175 |
|
| Hedging derivative Instruments |
965 |
|
965 |
|
| Total financial assets measured at fair value |
253,101 |
35,711 |
212,558 |
4,832 |
| Transfers from Level 1: Quoted prices in active markets
for identical instruments |
75 |
|
|
75 |
| Transfers from Level 2: Valuation based on observable
data |
455 |
(6) |
|
461 |
| Transfers from Level 3: Valuation based on unobservable
data |
116 |
8 |
108 |
|
| Total transfers to each level |
646 |
2 |
108 |
536 |
Level 1 to Level 3 transfers mainly involve treasury bills.
Level 2 to Level 3 transfers mainly involve client repos and interest rate swaps.
Level 3 to Level 1 transfers mainly involve derivatives held for trading on foreign
currencies and gold.
Level 3 to Level 2 transfers mainly involve unsubordinated debt securities and
derivatives
held for trading.
| € million |
31.12.2017 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial assets held for trading |
236,858 |
23,115 |
210,732 |
3,011 |
| Loans and receivables due from customers |
1,600 |
|
|
1,600 |
| Securities bought under repurchase agreements |
93,555 |
|
93,555 |
|
| Securities held for trading |
20,756 |
19,747 |
877 |
132 |
| Treasury bills and similar securities |
12,653 |
12,028 |
625 |
|
| Bonds and other fixed income securities |
4,618 |
4,235 |
251 |
132 |
| Equities and other equity variable income securities |
3,485 |
3,484 |
1 |
|
| Derivative instruments |
120,947 |
3,368 |
116,300 |
1,279 |
| Financial assets designated at fair value through profit
or loss |
143 |
|
|
143 |
| Loans and receivables due from credit institutions |
|
|
|
|
| Securities designated at fair value through profit or
loss |
141 |
|
|
141 |
| Bonds and other fixed income securities |
141 |
|
|
141 |
| Equities and other equity variable income securities |
|
|
|
|
| Loans and advances |
2 |
|
|
2 |
| Loans and advances due from customers |
2 |
|
|
2 |
| Available-for-sale financial assets |
27,304 |
26,471 |
532 |
301 |
| Treasury bills and similar securities |
8,143 |
8,059 |
84 |
|
| Bonds and other fixed income securities |
17,610 |
17,159 |
432 |
19 |
| Equities and other equity variable income securities |
1,551 |
1,253 |
16 |
282 |
| Hedging derivative instruments |
1,101 |
|
1,101 |
|
| Total financial assets measured at fair value |
265,408 |
49,586 |
212,365 |
3,457 |
| Transfers from level 1: Quoted prices in active markets
for identical instruments |
119 |
|
119 |
|
| Transfers from level 2: Valuation based on observable
data |
115 |
21 |
|
94 |
| Transfers from level 3: Valuation based on unobservable
data |
94 |
3 |
91 |
|
| Total transfers to each level |
328 |
24 |
210 |
94 |
Level 1 to level 2 transfers involves AFS securities and bonds.
Level 2 to level 1 transfers involve shares.
Level 2 to level 3 transfers mainly involve interest rate swaps.
Level 3 to Level 2 mainly involves bonds.
► Financial liabilities
measured at fair value
| € million |
31.12.2018 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial liabilities held for trading |
208,156 |
29,802 |
173,984 |
4,370 |
| Securities sold short |
25,433 |
24,811 |
403 |
219 |
| Securities sold under repurchase agreements |
75,945 |
|
73,621 |
2,324 |
| Debt securities |
|
|
|
|
| Due to credit institutions |
|
|
|
|
| Due to customers |
|
|
|
|
| Derivative instruments |
106,778 |
4,991 |
99,960 |
1,827 |
| Financial liabilities designated at fair value through
profit or loss |
26,724 |
|
18,309 |
8,415 |
| Hedging derivative Instruments |
1,067 |
|
1,067 |
|
| Total financial liabilities measured at fair value |
235,947 |
29,802 |
193,360 |
12,785 |
| Transfers from Level 1: Quoted prices in active markets
for identical instruments |
|
|
|
|
| Transfers from Level 2: Valuation based on observable
data |
811 |
|
|
811 |
| Transfers from Level 3: Valuation based on unobservable
data |
395 |
10 |
385 |
|
| Total transfers to each level |
1,206 |
10 |
385 |
811 |
Level 2 to Level 3 transfers mainly involve negotiable debt securities recognised
at fair value through profit or loss option and interest rate swaps.
Level 3 to Level 1 transfers mainly involve trading derivatives.
Level 3 to Level 2 transfers mainly involve negotiable debt securities recognised
at fair value through profit or loss option and trading derivatives.
| € million |
31.12.2017 |
Quoted prices in active markets
for identical instruments Level 1 |
Valuation based on observable data
Level 2 |
Valuation based on unobservable
data Level 3 |
| Financial liabilities held for trading |
212,681 |
25,045 |
185,904 |
1,732 |
| Securities sold short |
22,598 |
22,372 |
226 |
|
| Securities sold under repurchase agreements |
67,355 |
|
67,355 |
|
| Debt securities |
2 |
2 |
|
|
| Derivative instruments |
122,726 |
2,671 |
118,323 |
1,732 |
| Financial liabilities designated at fair value through
profit or loss |
24,490 |
|
18,942 |
5,548 |
| Hedging derivative instruments |
1,005 |
|
1,005 |
|
| Total financial liabilities measured at fair value |
238,176 |
25,045 |
205,851 |
7,280 |
| Transfers from level 1: Quoted prices in active markets
for identical instruments |
3 |
|
|
3 |
| Transfers from level 2: Valuation based on observable
data |
127 |
|
|
127 |
| Transfers from level 3: Valuation based on unobservable
data |
2,171 |
|
2,171 |
|
| Total transfers to each level |
2,301 |
|
2,171 |
130 |
Level 2 to level 3 transfers mainly involve negotiable debt securities recognised
at fair value through profit or loss.
Level 3 to level 2 transfers mainly involve negotiable debt securities recognised
under the fair value option.
Financial instruments
classified in level 1
Level 1 comprises all derivatives quoted in an active market (options, futures,
etc.),
regardless of their underlying (interest rate, exchange rate, precious metals, key
stock indices), as well as equities and bonds quoted in an active market.
A market is regarded as being active if quoted prices are readily and regularly
available
from an exchange, broker, dealer, pricing service or regulatory agency, and those
prices represent actual and regularly occurring market transactions on an arm's length
basis.
Corporate and government bonds and agencies that are valued on the basis of prices
obtained from independent sources considered as executable and updated regularly are
classified in level 1. This covers the bulk of the sovereign, agency and corporate
bonds held. Issuers whose bonds are not quoted are classified in level 3.
Financial instruments
classified in level 2
Main financial instruments classified in level 2 are:
| ― |
liabilities designated at fair value:
|
| ― |
Liabilities designated at fair value through profit or losses
are classified in level
2 when their embedded derivative is considered to be classified in level 2;
|
| ― |
over-the-counter derivatives:
|
| ― |
The main OTC derivatives classified in level 2 are those valued
using inputs considered
to be observable and where the valuation technique does not generate any significant
exposure to a model risk.
|
Thus, Level 2 therefore mainly comprises:
| ― |
linear derivative products such as interest rate swaps, currency
swaps and forward
FX. They are valued using simple models widely used in the market, based on either
directly observable parameters (foreign exchange rates, interest rates) or inputs
that can be derived from market prices of observable products (foreign exchange swaps);
|
| ― |
non-linear vanilla instruments such as caps, floors, swaptions,
currency options,
equity options and credit default swaps, including digital options. They are valued
using simple models widely used in the market, based either on directly observable
inputs (foreign exchange rates, interest rates, share prices) or inputs that can be
derived from observable market prices (volatilities);
|
| ― |
simple exotic single-underlying instruments such as cancellable
swaps, currency baskets
of major currencies.
|
They are valued using models that are sometimes slightly more complex but still
widely
used in the market. The parameters are mainly observable inputs and market prices,
obtained notably from brokers and/or market consensus data, which can be used to corroborate
internal valuations;
| ― |
securities listed on a market deemed inactive and for which independent
valuation
data are available.
|
Financial instruments
classified in level 3
Financial instruments classified in level 3 are those which do not meet the conditions
for classification in level 1 or 2. They are therefore mainly financial instruments
with a high model risk whose valuation requires substantial use of unobservable parameters.
The initial margin on all new transactions classified in level 3 is reserved at the
date of initial recognition. It is reintegrated in the profit or loss account either
spread over the period during which the inputs are considered to be unobservable or
in full on the date when the inputs become observable.
Thus, Level 3 therefore mainly comprises:
- Securities
Level 3 securities mainly include:
| ― |
unlisted shares or bonds for which no independent valuation is
available;
|
| ― |
ABSs and CLOs for which there are indicative independent quotes
but these are not
necessarily executable;
|
| ― |
ABSs, CLOs and super senior and mezzanine CDO tranches where
it cannot be demonstrated
that the market is active.
|
- Liabilities designated at fair value:
Liabilities designated at fair value through profit or loss are classified in level
3 when their embedded derivative is considered to be classified in level 3.
- Over-the-counter derivatives:
Unobservable income groups complex financial instruments, significantly exposed
to
the model risk or involving parameters considered to be unobservable.
All of these principles are mapped for observability in the three levels indicating
the level chosen for each product, currency and maturity.
Level 3 mainly comprises:
| ― |
interest rate exposures or very long-dated currency swaps or
swaps on emerging currencies;
|
| ― |
equity exposures, mainly through products traded on shallow option
markets or indexed
to volatility and long-dated forward or futures contracts;
|
| ― |
exposures to non-linear (interest rate or forex) instruments
with a long maturity
on key currencies/indices;
|
| ― |
non-linear exposures to emerging market currencies;
|
| ― |
complex derivatives: These derivatives are classified in level
3 as their valuation
requires the use of unobservable inputs.
|
The main exposures involved are:
| ― |
products whose underlying is the difference between two interest
rates, such as options,
binary options or exotic products. These products are based on a correlation between
the two rates, which is considered to be unobservable due to reduced liquidity. The
valuation of these exposures is nonetheless adjusted at the month-end on the basis
of correlation levels derived from market consensus data;
|
| ― |
products whose underlying is the forward volatility of an index
(Euribor, CMS spread).
These products are deemed unobservable as there is significant model risk and their
thin liquidity prevents regular and accurate estimates of inputs;
|
| ― |
securitisation swaps generating an exposure to the prepayment
rate. The prepayment
rate is determined on the basis of historical data on similar portfolios. The assumptions
and inputs used are checked regularly on the basis of actual prepayments;
|
| ― |
long-term interest rates / foreign exchange hybrid products of
the Power Reverse Dual
Currency type, or products whose underlying asset is a basket of foreign currencies.
The correlation parameters between interest rates and currencies as well as between
the two interest rates are determined using an internal methodology based on historical
data. Results are cross-checked against market consensus data to ensure that the overall
method is coherent;
|
| ― |
multiple-underlying products generating an exposure to correlations,
regardless of
the underlyings concerned (interest rates, credit, FX, inflation and shares);
|
| ― |
CDOs based on corporate credit baskets. These are now insignificant;
|
| ― |
certain portfolios of complex derivatives on shares.
|
|
|
Carrying amount (in
million of euros) |
Main product types comprising Level
3 |
Valuation technique used |
Main unobservable inputs |
Unobservable data interval |
| Instrument classes |
Assets |
Liabilities |
|
|
|
|
| Interest rate derivatives |
1,277 |
1,649 |
Long-dated cancellable products (cancellable zero coupon
swaps) |
Interest rate options valuation model |
Forward volatility |
|
|
|
|
|
Options on interest rate differentials |
|
CMS correlations |
0% / 100% |
|
|
|
|
Securitisation swaps |
Prepayment modelling and discounted future cash flows |
Prepayment rate |
0% / 50% |
|
|
|
|
Long-dated hybrid interest rate/ exchange rate products
(PRDC) |
Interest rate/FX hybrid product valuation model |
Interest rate/interest rate correlation |
50% / 50% |
|
|
|
|
|
|
Interest rate/ FX correlation |
-50% / 50% |
|
|
|
|
Multiple-underlying products (dual range, etc.) |
Valuation models for instruments with multiple underlyings |
FX/Equity correlation |
-50% / 75% |
|
|
|
|
|
|
FX/FX correlation |
-20% / 50% |
|
|
|
|
|
|
Interest rate/equity correlation |
-25% / 75% |
|
|
|
|
|
|
Interest rate/interest rate correlation |
-10% / 100% |
|
|
|
|
|
|
Interest rate/ FX correlation |
-10% / 100% |
| Credit derivatives |
10 |
15 |
CDOs indexed to corporate credit baskets |
Correlation projection techniques and expected cash flow
modelling |
Default correlations |
50% / 90% |
NET CHANGES IN
FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ACCORDING TO LEVEL 3
► Financial assets
measured at fair value according to level 3
|
|
|
Held-for-trading
financial assets |
|
|
Total |
Loans and receivables due from
customers |
Securities bought under repurchase
agreement |
Financial assets
held for trading |
| € million |
|
|
|
Treasury bills and similar items |
Bonds and other fixed income securities |
Securities held for trading |
| Opening balance (01.01.2018) |
3,542 |
1,571 |
|
|
132 |
132 |
| Gains or losses for the period (1) |
100 |
49 |
|
|
1 |
1 |
| Accounted in profit and loss |
(63) |
(6) |
|
|
1 |
1 |
| Accounted in other comprehensive income |
164 |
55 |
|
|
|
|
| Purchases |
1,823 |
|
617 |
445 |
2 |
447 |
| Sales |
(1,880) |
(1,614) |
|
|
|
|
| Issues |
|
|
|
|
|
|
| Settlements |
(514) |
|
|
|
(56) |
(56) |
| Reclassifications |
1,368 |
1,368 |
|
|
|
|
| Changes associated with scope during the period |
(27) |
|
|
|
|
|
| Transfers |
420 |
|
350 |
|
(31) |
(31) |
| Transfers to level 3 |
535 |
|
350 |
|
|
|
| Transfers out of level 3 |
(115) |
|
|
|
(31) |
(31) |
| Closing balance (31.12.2018) |
4,832 |
1,374 |
967 |
445 |
48 |
493 |
|
|
Held-for-trading financial assets |
Other financial instruments
at fair value through profit or loss |
|
|
Derivative instruments |
Equity instruments
at fair value through profit or loss |
Debt instruments
that do not meet the conditions of the "SPPI" test |
|
|
|
|
|
|
Debt securities |
| € million |
|
Equities and other variable income
securities |
Non consolidated equity investments |
Loans and receivables due from
customers |
Bonds and other fixed income securities |
Debt securities |
| Opening balance (01.01.2018) |
1,279 |
4 |
58 |
85 |
154 |
154 |
| Gains or losses for the period (1) |
(65) |
7 |
3 |
11 |
(15) |
(15) |
| Accounted in profit and loss |
(65) |
7 |
3 |
11 |
(15) |
(15) |
| Accounted in other comprehensive income |
|
|
|
|
|
|
| Purchases |
717 |
1 |
|
1 |
|
|
| Sales |
|
(2) |
|
(23) |
(128) |
(128) |
| Issues |
|
|
|
|
|
|
| Settlements |
(453) |
|
|
|
(1) |
(1) |
| Reclassifications |
|
|
|
|
|
|
| Changes associated with scope during the period |
|
7 |
|
|
|
|
| Transfers |
21 |
|
8 |
|
|
|
| Transfers to level 3 |
106 |
|
8 |
|
|
|
| Transfers out of level 3 |
(85) |
|
|
|
|
|
| Closing balance (31.12.2018) |
1,499 |
17 |
69 |
74 |
10 |
10 |
|
|
Financial assets
at fair value through other comprehensive income |
|
|
Equity instruments
at fair value through other comprehensive income that will not
be reclassified to profit and loss
|
Financial assets
designated at fair value through profit or loss |
|
|
|
Debt securities |
| € million |
Equities and other variable income
securities |
Non consolidated equity investments |
Treasury bills and similar securities |
Bonds and other fixed income securities |
Debt securities |
| Opening balance (01.01.2018) |
57 |
181 |
(1) |
22 |
21 |
| Gains or losses for the period (1) |
(4) |
113 |
|
|
|
| Accounted in profit and loss |
|
|
|
|
|
| Accounted in other comprehensive income |
(4) |
113 |
|
|
|
| Purchases |
|
40 |
|
|
|
| Sales |
(19) |
(72) |
|
(22) |
(22) |
| Issues |
|
|
|
|
|
| Settlements |
|
(5) |
1 |
|
1 |
| Reclassifications |
|
|
|
|
|
| Changes associated with scope during the period |
|
(34) |
|
|
|
| Transfers |
|
(1) |
72 |
|
72 |
| Transfers to level 3 |
|
(1) |
72 |
|
72 |
| Transfers out of level 3 |
|
|
|
|
|
| Closing balance (31.12.2018) |
34 |
222 |
72 |
|
72 |
(1)
This balance includes the gains and losses of the period made on assets reported on
the balance sheet at the reporting date, for the following amounts:
| Gains/ losses for the period from level 3 assets held
at the end of the period |
1 |
| Recognised in profit or loss |
(49) |
| Recognised in other comprehensive income |
50 |
► Financial liabilities
measured at fair value according to Level 3
|
|
Total |
Financial liabilities
held for trading |
| € million |
|
Securities sold short |
Securities sold under repurchase
agreements |
Debt securities |
Due to credit institutions |
Due to customers |
| Opening balance (01.01.2018) |
7,280 |
|
|
|
|
|
| Gains or losses during the period (1) |
8 |
|
|
|
|
|
| Recognised in profit or loss |
8 |
|
|
|
|
|
| Recognised in other comprehensive income |
|
|
|
|
|
|
| Purchases |
3,000 |
220 |
2,324 |
|
|
|
| Sales |
(2) |
|
|
|
|
|
| Issues |
2,696 |
|
|
|
|
|
| Settlements |
(613) |
|
|
|
|
|
| Reclassifications |
|
|
|
|
|
|
| Changes associated with scope during the period |
|
|
|
|
|
|
| Transfers |
416 |
|
|
|
|
|
| Transfers to Level 3 |
811 |
|
|
|
|
|
| Transfers from Level 3 |
(395) |
|
|
|
|
|
| Closing balance (31.12.2018) |
12,785 |
220 |
2,324 |
|
|
|
|
|
Financial liabilities held for
trading |
Financial liabilities designated
at fair value through profit or loss |
Hedging derivative instruments |
| € million |
Derivative Instruments |
|
|
| Opening balance (01.01.2018) |
1,732 |
5,548 |
|
| Gains or losses during the period (1) |
(160) |
168 |
|
| Recognised in profit or loss |
(160) |
168 |
|
| Recognised in other comprehensive income |
|
|
|
| Purchases |
456 |
|
|
| Sales |
(2) |
|
|
| Issues |
|
2,696 |
|
| Settlements |
(125) |
(487) |
|
| Reclassifications |
|
(1) |
|
| Changes associated with scope during the period |
|
|
|
| Transfers |
(74) |
490 |
|
| Transfers to Level 3 |
128 |
683 |
|
| Transfers from Level 3 |
(202) |
(193) |
|
| Closing balance (31.12.2018) |
1,827 |
8,414 |
|
(1)
This balance includes the gains and losses of the period made on liabilities reported
on the balance sheet at the closing date, for the following amounts:
| Gains/ losses for the period from level 3 assets held
at the end of the period |
8 |
| Recognised in profil: or loss |
8 |
| Recognised in other comprehensive income |
|
The fair value amount (and variance) on these products alone is not however representative.
Indeed, these products are largely hedged by others, simpler and individually valued,
using data considered as observable. The actual valuations (and their variances) of
these hedged products, which are mainly symmetrical to those of the products measured
on the basis of data considered to be unobservable, do not appear in the table of
financial assets and liabilities measured at fair value according to level 3, above.
♦ Sensitivity
analysis of financial instruments valued according to level 3
The use of unobservable parameters introduces uncertainty, which we have assessed
below using a sensitivity calculation on instruments valued using these inputs.
SCOPE OF INTEREST
RATE DERIVATIVES
On the scope of interest rate derivatives, two main factors are considered to be
unobservable
and likely to lead to the associated products being classified under level 3: the
correlation and prepayment rates (i.e. early redemption).
Correlation
| ― |
Many instruments are sensitive to a correlation input. However,
this parameter is
not unique and there are many different correlation types, including:
|
| ― |
forward correlation between successive indices on the same currency
- e.g. CMS 2 years
/ CMS 10 years;
|
| ― |
interest rate/interest rate correlation (different indices) -
e.g. Libor USD 3 MILLION/Libor
€3 MILLION;
|
| ― |
interest rate/FX correlation (or Quanto) - e.g. USD/JPY - USD;
|
| ― |
equity/equity correlation;
|
| ― |
equity/foreign exchange correlation;
|
| ― |
equity/interest rates correlation;
|
| ― |
FX/FX correlation.
|
Prepayment rate
| ― |
The prepayment rate is the rate of early repayment on securitisation
portfolios, whether
voluntary or involuntary (default). Exposure to this risk factor can stem from two
types of sources: firstly, direct exposure to these asset classes and, secondly, certain
so-called "securitisation" swaps, i.e. where changes in the nominal amount automatically
adjust to the nominal amount of the underlying portfolio with no mark-to-market payment.
The prepayment rate plays a significant part in their valuation.
|
CALCULATION OF
IMPACT
With respect to
correlation
| ― |
The results presented below have been obtained by applying different
shocks depending
on the nature of the risk factor:
|
| ― |
correlations between successive indices in the same currency
(i.e. CMS correlations);
|
| ― |
cross-asset correlations (e.g. Equity/forex or IR/Equity) and
between two interest
rate curves in different currencies.
|
| ― |
The result of the stress is the equivalent of the sum of the
absolute values obtained.
|
For each type of correlation, we have considered the absolute values by currency,
maturity and book, thus making a cautious assumption. For the CMS correlations, we
considered the various underlyings independently (e.g. 1y10y, 2y10y).
At 31 December 2018, the sensitivity to the parameters used in the models of interest
rate derivatives was +/- €12 million.
The quantity expressed is a sensitivity for an assumption of normalised market
variation
which is not intended to measure the impact of extreme variations.
With respect to
the prepayment rate
Direct exposure to assets comprising a prepayment risk concerns securitisations
such
as RMBS and CLO and mezzanine CDO tranches. These exposures are marginal. They can
be taken into account through sensitivity to a 1 bp change in credit spreads. This
sensitivity being very low (<€50,000/bp), exposure to the pre-payment rate is thus
considered to be negligible.
The prepayment rate is not an observable market input and the valuation model used
for the securitisation swaps is particularly conservative. The valuation used is defined
as the lower of the valuation obtained using a very fast prepayment rate and using
a very slow prepayment rate. A "normal" variance in the prepayment rate will therefore
have no material impact on mark-to-market, no Day One thus being used for these products.
110.3 Estimated
impact of inclusion of the margin at inception
| € million |
31.12.2018 |
31.12.2017 |
| Deferred margin at 1 st January
|
67 |
69 |
| Margin generated by new transactions during the period |
26 |
20 |
| Recognised in net income during the period |
|
|
| Amortisation and cancelled / reimbursed / matured transactions |
(32) |
(22) |
| Profit-sharing and incentive plans |
|
|
| Effects of inputs or products reclassified as observable
during the period |
|
|
| Deferred margin at the end of the period |
61 |
67 |
The margin on the 1 st day on market transactions coming under level
3 of fair value is reserved for on
the balance sheet and recognised in profit or loss over time or when the non-observable
parameters become observable.
NOTE 11: SCOPE
OF CONSOLIDATION AT 31 DECEMBER 2018
11.1 Information
on the subsidiaries
11.1.1 RESTRICTIONS
ON CONTROLLED ENTITIES
Crédit Agricole CIB is subject to the following restrictions:
♦ Regulatory constraints
The subsidiaries of Crédit Agricole CIB are subject to prudential regulation and
regulatory
capital requirements in their host countries. The minimum equity capital (solvency
ratio), leverage ratio and liquidity ratio requirements limit the capacity of these
entities to pay dividends or to transfer assets to Crédit Agricole CIB.
♦ Legal constraints
The subsidiaries of Crédit Agricole CIB are subject to legal provisions concerning
the distribution of capital and distributable earnings. These requirements limit the
ability of the subsidiaries to distribute dividends. In the majority of cases, these
are less restrictive than the regulatory limitations mentioned above.
♦ Other constraints:
Certain subsidiaries of Crédit Agricole CIB must submit the preliminary agreement
of their regulatory authorities for the payment of dividends.
11.1.2 SUPPORT
FOR STRUCTURED ENTITIES UNDER GROUP CONTROL
Crédit Agricole CIB has contractual arrangements with some consolidated structured
entities under Group control that equate to commitments to provide financial support.
To meet its funding needs Crédit Agricole CIB uses structured debt issuance vehicles
to raise cash on financial markets. The securities issued by these entities are fully
underwritten by Crédit Agricole CIB. At 31 December 2018, the outstanding volume of
these issues was €27 billion.
As part of its third-party securitisation business, Crédit Agricole CIB provides
liquidity
lines to its ABCP conduits. At 31 December 2018, these liquidity lines totalled €35
billion.
11.2 Composition
of the consolidation group
The scope of consolidation at 31 December 2018 is detailed as follows:
| Crédit Agricole S.A. Group Scope
of consolidation |
(a) |
Location |
Country of incorporation if different
from location |
Nature of entity and control (b) |
Consolidation method 31.12.2018 |
| Parent company and its branches |
|
|
|
|
|
| Crédit Agricole CIB S.A. |
|
France |
|
Parent company |
Parent |
| Crédit Agricole CIB (Dubai) |
|
United Arab Emirates |
France |
Branch |
Full |
| Crédit Agricole CIB (Dubai DIFC) |
|
United Arab Emirates |
France |
Branch |
Full |
| Crédit Agricole CIB (Abu Dhabi) |
|
United Arab Emirates |
France |
Branch |
Full |
| Crédit Agricole CIB (South Korea) |
|
South Korea |
France |
Branch |
Full |
| Crédit Agricole CIB (Spain) |
|
Spain |
France |
Branch |
Full |
| Crédit Agricole CIB (India) |
|
India |
France |
Branch |
Full |
| Crédit Agricole CIB (Japan) |
|
Japan |
France |
Branch |
Full |
| Crédit Agricole CIB (Singapore) |
|
Singapore |
France |
Branch |
Full |
| Crédit Agricole CIB (United Kingdom) |
|
United Kingdom |
France |
Branch |
Full |
| Crédit Agricole CIB (Hong-Kong) |
|
Hong-Kong |
France |
Branch |
Full |
| Crédit Agricole CIB (United States) |
|
United States |
France |
Branch |
Full |
| Crédit Agricole CIB (Taipei) |
|
Taiwan |
France |
Branch |
Full |
| Crédit Agricole CIB (Luxembourg) |
|
Luxembourg |
France |
Branch |
Full |
| Crédit Agricole CIB (Finland) |
|
Finland |
France |
Branch |
Full |
| Crédit Agricole CIB (Germany) |
|
Germany |
France |
Branch |
Full |
| Crédit Agricole CIB (Sweden) |
|
Sweden |
France |
Branch |
Full |
| Crédit Agricole CIB (Italy) |
|
Italy |
France |
Branch |
Full |
| Crédit Agricole CIB (Belgium) |
|
Belgium |
France |
Branch |
Full |
| Crédit Agricole CIB (Miami) |
|
United States |
France |
Branch |
Full |
| Crédit Agricole CIB (Canada) |
|
Canada |
France |
Branch |
Full |
| Banking and financial institutions |
|
|
|
|
|
| Banco Crédit Agricole Brasil S.A. |
|
Brasil |
|
Subsidiary |
Full |
| Crédit Agricole CIB Algeria Bank Spa |
|
Algeria |
|
Subsidiary |
Full |
| Crédit Agricole CIB Australia Ltd. |
|
Australia |
|
Subsidiary |
Full |
| Crédit Agricole CIB China Ltd. |
|
China |
|
Subsidiary |
Full |
| Crédit Agricole CIB China Ltd. Chinese Branch |
|
China |
|
Branch |
Full |
| Crédit Agricole CIB Services Private Ltd. |
|
India |
|
Subsidiary |
Full |
| Crédit Agricole CIB AO |
|
Russia |
|
Subsidiary |
Full |
| CA Indosuez Wealth (Europe) |
|
Luxembourg |
|
Subsidiary |
Full |
| CA Indosuez Wealth (Europe -Spain) |
|
Spain |
Luxembourg |
Branch |
Full |
| CA Indosuez Wealth (Europe -Belgium) |
|
Belgium |
Luxembourg |
Branch |
Full |
| CA Indosuez Wealth (Europe -Italy) |
|
Italy |
Luxembourg |
Branch |
Full |
| CA Indosuez (Switzerland) S.A. |
|
Switzerland |
|
Subsidiary |
Full |
| CA Indosuez (Switzerland) S.A. (Hong Kong) |
|
Hong-Kong |
Switzerland |
Branch |
Full |
| CA Indosuez (Switzerland) S.A. (Singapore) |
|
Singapore |
Switzerland |
Branch |
Full |
| CA Indosuez (Switzerland) S.A. Switzerland Branch |
|
Switzerland |
|
Branch |
Full |
| CFM Indosuez Wealth |
|
Monaco |
|
Subsidiary |
Full |
| CA Indosuez Finanziaria S.A. |
|
Switzerland |
|
Subsidiary |
Full |
| UBAF |
|
France |
|
Joint-Venture |
Equity |
| UBAF (Japan) |
|
Japan |
France |
Joint-Venture |
Equity |
| UBAF (South Korea) |
|
South Korea |
France |
Joint-Venture |
Equity |
| UBAF (Singapore) |
|
Singapore |
France |
Joint-Venture |
Equity |
| CA Indosuez Wealth (France) |
|
France |
|
Subsidiary |
Full |
| CA Indosuez Gestion |
|
France |
|
Subsidiary |
Full |
| Ester Finance Titrisation |
|
France |
|
Subsidiary |
Full |
| Banca Leonardo S.p.A. |
E3 |
Italy |
|
Subsidiary |
Full |
| Brokerage companies |
|
|
|
|
|
| Crédit Agricole Securities (USA) Inc |
|
United States |
|
Subsidiary |
Full |
| Crédit Agricole Securities (Asia) Ltd |
|
Hong Kong |
|
Subsidiary |
Full |
| Crédit Agricole Securities Asia Limited Seoul Branch
(CASAL Seoul Branch) |
|
South Korea |
|
Branch |
Full |
| Crédit Agricole Securities Asia BV (Tokyo) |
|
Japan |
Netherlands |
Branch |
Full |
| Investment companies |
|
|
|
|
|
| CA Indosuez Wealth (Brazil) S.A. DTVM |
|
Brasil |
|
Subsidiary |
Full |
| Compagnie Française de l'Asie (CFA) |
|
France |
|
Subsidiary |
Full |
| Crédit Agricole CIB Air Finance S.A. |
|
France |
|
Subsidiary |
Full |
| Crédit Agricole Securities Asia BV |
|
Netherlands |
|
Subsidiary |
Full |
| Crédit Agricole Global Partners Inc. |
|
United States |
|
Subsidiary |
Full |
| Crédit Agricole CIB Holdings Ltd. |
|
United Kingdom |
|
Subsidiary |
Full |
| CA Indosuez Wealth (Groupe) |
|
France |
|
Subsidiary |
Full |
| Doumer Finance S.A.S. |
|
France |
|
Subsidiary |
Full |
| Fininvest |
|
France |
|
Subsidiary |
Full |
| Fletirec |
|
France |
|
Subsidiary |
Full |
| I.P.F.O. |
|
France |
|
Subsidiary |
Full |
| CLTR |
S3 |
France |
|
Subsidiary |
Full |
| Igasus LLC |
S3 |
United States |
|
Subsidiary |
Full |
| CFM Indosuez Conseil en Investissement |
E1 |
France |
|
Subsidiary |
Full |
| CFM Indosuez Gestion |
E1 |
Monaco |
|
Subsidiary |
Full |
| CFM Indosuez Conseil en Investissement, Branch de Noumea |
E1 |
France |
France |
Branch |
Full |
| Insurance companies |
|
|
|
|
|
| CAIRS Assurance S.A. |
|
France |
|
Subsidiary |
Full |
| Others |
|
|
|
|
|
| Calixis Finance |
|
France |
|
Controlled structured entity |
Full |
| Calliope srl |
|
Italy |
|
Controlled structured entity |
Full |
| CLIFAP |
|
France |
|
Subsidiary |
Full |
| Crédit Agricole Asia Shipfinance Ltd. |
|
Hong-kong |
|
Subsidiary |
Full |
| Crédit Agricole CIB Finance (Guernsey) Ltd. |
|
Guernesey |
|
Controlled structured entity |
Full |
| Crédit Agricole CIB Financial Prod. (Guernsey) Ltd. |
|
Guernesey |
|
Controlled structured entity |
Full |
| Crédit Agricole CIB Financial Solutions |
|
France |
|
Controlled structured entity |
Full |
| Crédit Agricole CIB Global Banking |
|
France |
|
Subsidiary |
Full |
| DGAD International SARL |
|
Luxembourg |
|
Subsidiary |
Full |
| Indosuez Holding SCA II |
|
Luxembourg |
|
Controlled structured entity |
Full |
| Indosuez Management Luxembourg II |
|
Luxembourg |
|
Controlled structured entity |
Full |
| Island Refinancing Srl |
|
Italy |
|
Controlled structured entity |
Full |
| MERISMA |
|
France |
|
Controlled structured entity |
Full |
| Sagrantino Italy srl |
|
Italy |
|
Controlled structured entity |
Full |
| Benelpart |
|
Belgium |
|
Subsidiary |
Full |
| Financière des Scarabées |
|
Belgium |
|
Subsidiary |
Full |
| Lafina |
|
Belgium |
|
Subsidiary |
Full |
| SNGI Belgium |
|
Belgium |
|
Subsidiary |
Full |
| Sococlabecq |
|
Belgium |
|
Subsidiary |
Full |
| TCB |
|
France |
|
Subsidiary |
Full |
| Molinier Finances |
|
France |
|
Subsidiary |
Full |
| SNGI |
|
France |
|
Subsidiary |
Full |
| Sofipac |
|
Belgium |
|
Subsidiary |
Full |
| Placements et réalisations immobilères (SNC) |
|
France |
|
Subsidiary |
Full |
| Crédit Agricole Leasing (USA) Corp. |
|
United States |
|
Subsidiary |
Full |
| Crédit Agricole America Services Inc. |
|
United States |
|
Subsidiary |
Full |
| CA Indosuez Wealth (Asset Management) |
|
Luxembourg |
|
Subsidiary |
Full |
| Atlantic Asset Securitization LLC |
|
United States |
|
Controlled structured entity |
Full |
| LMA SA |
|
France |
|
Controlled structured entity |
Full |
| FIC-FIDC |
|
Brasil |
|
Controlled structured entity |
Full |
| Héphaïstos EUR FCC |
|
France |
|
Controlled structured entity |
Full |
| Héphaïstos GBP FCT |
|
France |
|
Controlled structured entity |
Full |
| Héphaïstos USD FCT |
|
France |
|
Controlled structured entity |
Full |
| Héphaïstos Multidevises FCT |
|
France |
|
Controlled structured entity |
Full |
| Eucalyptus FCT |
|
France |
|
Controlled structured entity |
Full |
| Pacific USD FCT |
|
France |
|
Controlled structured entity |
Full |
| Shark FCC |
|
France |
|
Controlled structured entity |
Full |
| Vulcain EUR FCT |
|
France |
|
Controlled structured entity |
Full |
| Vulcain Multi-Devises FCT |
|
France |
|
Controlled structured entity |
Full |
| Vulcain USD FCT |
|
France |
|
Controlled structured entity |
Full |
| Pacific EUR FCC |
|
France |
|
Controlled structured entity |
Full |
| Pacific IT FCT |
|
France |
|
Controlled structured entity |
Full |
| Triple P FCC |
|
France |
|
Controlled structured entity |
Full |
| ESNI (compartiment Crédit Agricole CIB) |
|
France |
|
Controlled structured entity |
Full |
| Elipso Finance S.r.l |
|
Italy |
|
Joint-Venture |
Equity |
| CACIB Pension Limited Partnership |
|
United Kingdom |
|
Controlled structured entity |
Full |
| ItalAsset Finance SRL |
|
Italy |
|
Controlled structured entity |
Full |
| Financière Lumis |
|
France |
|
Subsidiary |
Full |
| Lafayette Asset Securitization LLC |
|
United States |
|
Controlled structured entity |
Full |
| Fundo A De Investimento Multimercado |
|
Brasil |
|
Controlled structured entity |
Full |
| Tsubaki ON |
|
France |
|
Controlled structured entity |
Full |
| Tsubaki OFF |
|
France |
|
Controlled structured entity |
Full |
| Azqore |
E2 |
Switzerland |
|
Subsidiary |
Full |
| Azqore Singapore Branch SA |
E2 |
Singapore |
Switzerland |
Branch |
Full |
| Crédit Agricole CIB Transactions |
E1 |
France |
|
Subsidiary |
Full |
| FCT La Route Avance |
D5 |
France |
|
Controlled structured entity |
Full |
| Crédit Agricole S.A. Group Scope
of consolidation |
% of control |
% interest |
|
|
31.12.18 |
31.12.17 |
31.12.18 |
31.12.17 |
| Parent company and its branches |
|
|
|
|
| Crédit Agricole CIB S.A. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Dubai) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Dubai DIFC) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Abu Dhabi) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (South Korea) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Spain) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (India) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Japan) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Singapore) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (United Kingdom) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Hong-Kong) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (United States) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Taipei) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Luxembourg) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Finland) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Germany) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Sweden) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Italy) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Belgium) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Miami) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB (Canada) |
100.00 |
100.00 |
100.00 |
100.00 |
| Banking and financial institutions |
|
|
|
|
| Banco Crédit Agricole Brasil S.A. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB Algeria Bank Spa |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB Australia Ltd. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB China Ltd. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB China Ltd. Chinese Branch |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB Services Private Ltd. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB AO |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez Wealth (Europe) |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez Wealth (Europe -Spain) |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez Wealth (Europe -Belgium) |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez Wealth (Europe -Italy) |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez (Switzerland) S.A. |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez (Switzerland) S.A. (Hong Kong) |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez (Switzerland) S.A. (Singapore) |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez (Switzerland) S.A. Switzerland Branch |
100.00 |
100.00 |
100.00 |
100.00 |
| CFM Indosuez Wealth |
70.13 |
70.13 |
68.96 |
68.96 |
| CA Indosuez Finanziaria S.A. |
100.00 |
100.00 |
100.00 |
100.00 |
| UBAF |
47.01 |
47.01 |
47.01 |
47.01 |
| UBAF (Japan) |
47.01 |
47.01 |
47.01 |
47.01 |
| UBAF (South Korea) |
47.01 |
47.01 |
47.01 |
47.01 |
| UBAF (Singapore) |
47.01 |
47.01 |
47.01 |
47.01 |
| CA Indosuez Wealth (France) |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez Gestion |
100.00 |
100.00 |
100.00 |
100.00 |
| Ester Finance Titrisation |
100.00 |
100.00 |
100.00 |
100.00 |
| Banca Leonardo S.p.A. |
94.16 |
|
94.06 |
|
| Brokerage companies |
|
|
|
|
| Crédit Agricole Securities (USA) Inc |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole Securities (Asia) Ltd |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole Securities Asia Limited Seoul Branch
(CASAL Seoul Branch) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole Securities Asia BV (Tokyo) |
100.00 |
100.00 |
100.00 |
100.00 |
| Investment companies |
|
|
|
|
| CA Indosuez Wealth (Brazil) S.A. DTVM |
100.00 |
100.00 |
100.00 |
100.00 |
| Compagnie Française de l'Asie (CFA) |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB Air Finance S.A. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole Securities Asia BV |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole Global Partners Inc. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole CIB Holdings Ltd. |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez Wealth (Groupe) |
100.00 |
100.00 |
100.00 |
100.00 |
| Doumer Finance S.A.S. |
100.00 |
100.00 |
100.00 |
100.00 |
| Fininvest |
98.33 |
98.33 |
98.33 |
98.33 |
| Fletirec |
100.00 |
100.00 |
100.00 |
100.00 |
| I.P.F.O. |
100.00 |
100.00 |
100.00 |
100.00 |
| CLTR |
|
100.00 |
|
100.00 |
| Igasus LLC |
|
100.00 |
|
100.00 |
| CFM Indosuez Conseil en Investissement |
70.13 |
|
68.96 |
|
| CFM Indosuez Gestion |
70.13 |
|
67.58 |
|
| CFM Indosuez Conseil en Investissement, Branch de Noumea |
70.13 |
|
68.96 |
|
| Insurance companies |
|
|
|
|
| CAIRS Assurance S.A. |
100.00 |
100.00 |
100.00 |
100.00 |
| Others |
|
|
|
|
| Calixis Finance |
100.00 |
100.00 |
100.00 |
100.00 |
| Calliope srl |
100.00 |
100.00 |
100.00 |
100.00 |
| CLIFAP |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole Asia Shipfinance Ltd. |
99.99 |
99.99 |
99.99 |
99.99 |
| Crédit Agricole CIB Finance (Guernsey) Ltd. |
99.90 |
99.90 |
99.90 |
99.90 |
| Crédit Agricole CIB Financial Prod. (Guernsey) Ltd. |
99.90 |
99.90 |
99.90 |
99.90 |
| Crédit Agricole CIB Financial Solutions |
99.92 |
99.68 |
99.92 |
99.68 |
| Crédit Agricole CIB Global Banking |
100.00 |
100.00 |
100.00 |
100.00 |
| DGAD International SARL |
100.00 |
100.00 |
100.00 |
100.00 |
| Indosuez Holding SCA II |
100.00 |
100.00 |
100.00 |
100.00 |
| Indosuez Management Luxembourg II |
100.00 |
100.00 |
99.99 |
99.99 |
| Island Refinancing Srl |
100.00 |
100.00 |
100.00 |
100.00 |
| MERISMA |
100.00 |
100.00 |
100.00 |
100.00 |
| Sagrantino Italy srl |
100.00 |
100.00 |
100.00 |
100.00 |
| Benelpart |
100.00 |
100.00 |
97.40 |
97.40 |
| Financière des Scarabées |
100.00 |
100.00 |
98.67 |
98.67 |
| Lafina |
100.00 |
100.00 |
97.74 |
97.74 |
| SNGI Belgium |
100.00 |
100.00 |
100.00 |
100.00 |
| Sococlabecq |
100.00 |
100.00 |
97.74 |
97.74 |
| TCB |
98.70 |
98.70 |
97.40 |
97.40 |
| Molinier Finances |
99.99 |
99.99 |
97.12 |
97.12 |
| SNGI |
100.00 |
100.00 |
100.00 |
100.00 |
| Sofipac |
98.58 |
98.58 |
96.02 |
96.02 |
| Placements et réalisations immobilères (SNC) |
100.00 |
100.00 |
97.40 |
97.40 |
| Crédit Agricole Leasing (USA) Corp. |
100.00 |
100.00 |
100.00 |
100.00 |
| Crédit Agricole America Services Inc. |
100.00 |
100.00 |
100.00 |
100.00 |
| CA Indosuez Wealth (Asset Management) |
100.00 |
100.00 |
100.00 |
100.00 |
| Atlantic Asset Securitization LLC |
100.00 |
100.00 |
|
|
| LMA SA |
100.00 |
100.00 |
|
|
| FIC-FIDC |
100.00 |
100.00 |
100.00 |
100.00 |
| Héphaïstos EUR FCC |
100.00 |
100.00 |
|
|
| Héphaïstos GBP FCT |
100.00 |
100.00 |
|
|
| Héphaïstos USD FCT |
100.00 |
100.00 |
|
|
| Héphaïstos Multidevises FCT |
100.00 |
100.00 |
|
|
| Eucalyptus FCT |
100.00 |
100.00 |
|
|
| Pacific USD FCT |
100.00 |
100.00 |
|
|
| Shark FCC |
100.00 |
100.00 |
|
|
| Vulcain EUR FCT |
100.00 |
100.00 |
|
|
| Vulcain Multi-Devises FCT |
100.00 |
100.00 |
|
|
| Vulcain USD FCT |
100.00 |
100.00 |
|
|
| Pacific EUR FCC |
100.00 |
100.00 |
|
|
| Pacific IT FCT |
100.00 |
100.00 |
|
|
| Triple P FCC |
100.00 |
100.00 |
|
|
| ESNI (compartiment Crédit Agricole CIB) |
100.00 |
100.00 |
100.00 |
100.00 |
| Elipso Finance S.r.l |
50.00 |
50.00 |
50.00 |
50.00 |
| CACIB Pension Limited Partnership |
100.00 |
100.00 |
100.00 |
100.00 |
| ItalAsset Finance SRL |
100.00 |
100.00 |
100.00 |
100.00 |
| Financière Lumis |
100.00 |
100.00 |
100.00 |
100.00 |
| Lafayette Asset Securitization LLC |
100.00 |
100.00 |
|
|
| Fundo A De Investimento Multimercado |
100.00 |
100.00 |
100.00 |
100.00 |
| Tsubaki ON |
100.00 |
100.00 |
|
|
| Tsubaki OFF |
100.00 |
100.00 |
|
|
| Azqore |
80.00 |
|
80.00 |
|
| Azqore Singapore Branch SA |
80.00 |
|
80.00 |
|
| Crédit Agricole CIB Transactions |
100.00 |
|
100.00 |
|
| FCT La Route Avance |
100.00 |
|
|
|
(a) Modification
of scop
Inclusions (E)
into the scope of consolidation
| E1: |
breach of threshold |
| E2: |
creation |
| E3: |
acquisition (including controlling interests) |
Subsidiary (S)
| SS1: |
discontinuation of business (including dissolution and
liquidation) |
| S2: |
sale to non-Group companies or deconsolidation following
loss of control |
| S3: |
deconsolidated due to non-materiality |
| S4: |
merger or takeover |
| S5: |
transfer of all assets and liabilities |
Other (D):
| D1: |
change of company name |
| D2: |
change in consolidation method |
| D3: |
first time listed in the Note on scope of consolidation |
| D4: |
IFRS 5 entities |
| D5: |
inclusion into scope related to IFRS 10 application |
| D6: |
change in consolidation method in application of IFRS
11 |
(b) Entity type
and nature of control
Subsidiary
Branch
Controlled structured entity
Joint venture
Exclusions (S) from the scope of consolidation
Structured joint venture
Joint operation Associate
Structured associate
NOTE 12: INVESTMENTS
IN NON-CONSOLIDATED COMPANIES AND STRUCTURED ENTITIES
12.1 Investments
in non-consolidated companies
These shares registered at fair value through profit or loss or fair value by non-recyclable
equity are variable-income securities that represent a significant portion of the
capital of the companies that issued them, and are intended to be held on a long-term
basis. This item amounted to €1.624 billion at 31 December 2018.
In accordance with the option offered by Recommendation ANC 2016-01, the exhaustive
list of non-consolidated controlled entities and of significant non-consolidated equity
investments can be consulted on the Crédit Agricole CIB website at the following address:
https://ca-cib.fr/nous-connaitre/elements-financiers/informations-reglementees
12.2 Information
on non-consolidated structured entities
In accordance with IFRS 12, a controlled structured entity is an entity designed
in
such a way that the voting rights or similar rights are not the factor determining
who controls the entity; this is notably the case when the voting rights only relate
to administrative tasks and the relevant activities are managed through contractual
agreements.
INFORMATION ON
THE NATURE AND EXTENT OF INTERESTS HELD
At 31 December 2018, Crédit Agricole CIB and its subsidiaries had interests in
certain
non-consolidated structured entities, the main characteristics of which are presented
below on the basis of their type of activity.
♦ Securitisation
Crédit Agricole CIB, is tasked with structuring securitisation vehicles through
the
purchase of trade or financial receivables. The vehicles fund such purchases by issuing
multiple tranches of debt and equity investments, with repayment being linked to the
performance of the assets in such vehicles.
Crédit Agricole CIB invests in and provides liquidity facilities to the securitisation
vehicles it has sponsored on behalf of customers.
♦ Structured Finance
Crédit Agricole CIB is involved in special purpose asset acquisition entities.
These
entities may take the form of asset financing companies or lease financing companies.
In structured entities, the financing is secured by the asset. The Group's involvement
is often limited to the financing or to financing commitments.
♦ Sponsored entities
Crédit Agricole CIB sponsors structured entities in the following instances:
| ― |
Crédit Agricole CIB is involved in establishing the entity and
that involvement, which
is remunerated, is deemed essential for ensuring the proper completion of transactions;
|
| ― |
structuring takes place at the request of Crédit Agricole CIB
and it is the main user
thereof;
|
| ― |
Crédit Agricole CIB transfers its own assets to the structured
entity;
|
| ― |
Crédit Agricole CIB is the manager;
|
| ― |
the name of a subsidiary or of the parent company of Crédit Agricole
CIB is linked
to the name of the structured entity or to the financial instruments issued by it.
|
Crédit Agricole CIB has sponsored its non-consolidated structured entities, in
which
it held no interest at 31 December 2018.
Gross income, mainly consisting of interest and commission in securitisation business
lines from sponsored entities in which Crédit Agricole CIB held no interest at the
close of the financial year amounted to €3 million at 31 December 2018.
INFORMATION ON
THE RISKS RELATED TO THE INTERESTS HELD
♦ Financial support
for structured entities
In 2018, Crédit Agricole CIB provided no financial support for non-consolidated
structured
entities.
At 31 December 2018, Crédit Agricole CIB had no intention to provide financial
support
for a non-consolidated structured entity.
♦ Interests held
in non-consolidated structured entities by type of business
The involvement of Crédit Agricole CIB in non-consolidated structured entities
at
31 December 2018 and at 31 December 2017 is presented in the tables below for all
categories of sponsored structured entities of material significance to Crédit Agricole
CIB:
|
|
31.12.2018 |
|
|
Securitisation vehicules |
|
|
Maximum loss |
| € million |
Carrying amount |
Maximum exposure to losses |
Guarantees received and other credit
enhancements |
Net exposure |
| Financial assets at fair value through profit or loss |
66 |
66 |
|
66 |
| Financial assets at fair value through other comprehensive
income |
|
|
|
|
| Financial assets at amortised cost |
16,537 |
16,540 |
152 |
16,388 |
| Total Assets recognised relating to nonconsolidated structured
entities |
16,603 |
16,606 |
152 |
16,454 |
| Equity instruments |
|
|
|
|
| Financial liabilities at fair value through profit or
loss |
42 |
|
|
42 |
| Liabilities |
173 |
|
|
|
| Total Liabilities recognised relating to nonconsolidated
structured entities |
215 |
|
|
42 |
| Commitments given |
|
5,483 |
|
5,483 |
| Financing commitments |
|
5,387 |
|
5,387 |
| Guarantee commitments |
|
|
|
|
| Other |
|
96 |
|
96 |
| Provisions for execution risks - commitments given |
|
|
|
|
| Total Commitments (net of provision) to non-consolidated
structured entities |
|
5,483 |
|
5,483 |
| Total Balance sheet relating to nonconsolidated structured
entities |
16,388 |
|
|
|
|
|
31.12.2018 |
|
|
Structured finance(1) |
|
|
Maximum loss |
| € million |
Carrying amount |
Maximum exposure to losses |
Guarantees received and other credit
enhancements |
Net exposure |
| Financial assets at fair value through profit or loss |
35 |
35 |
|
35 |
| Financial assets at fair value through other comprehensive
income |
12 |
12 |
|
12 |
| Financial assets at amortised cost |
2,346 |
2,346 |
|
2,346 |
| Total Assets recognised relating to nonconsolidated structured
entities |
2,393 |
2,393 |
|
2,393 |
| Equity instruments |
|
|
|
|
| Financial liabilities at fair value through profit or
loss |
4 |
|
|
4 |
| Liabilities |
569 |
|
|
|
| Total Liabilities recognised relating to nonconsolidated
structured entities |
573 |
|
|
4 |
| Commitments given |
|
1,445 |
|
1,445 |
| Financing commitments |
|
1,258 |
|
1,258 |
| Guarantee commitments |
|
187 |
|
187 |
| Other |
|
|
|
|
| Provisions for execution risks - commitments given |
|
|
|
|
| Total Commitments (net of provision) to non-consolidated
structured entities |
|
1,445 |
|
1,445 |
| Total Balance sheet relating to nonconsolidated structured
entities |
2,349 |
|
|
|
(1)
Non-sponsored structured entities generate no specific risk related to the nature
of the entity Information concerning these exposures is set out in Note 3.1 "Credit
risk" and Note " 3.2 "Market risk". These are investment funds in which the Group
is not a manager, and structured financing entities in which the Group has only granted
a loan.
|
|
31.12.2017 |
|
|
Securitisation vehicules |
|
|
Maximum loss |
| € million |
Carrying amount |
Maximum exposure to losses |
Guarantees received and other credit
enhancements |
Net exposure |
| financial assets held for trading |
238 |
238 |
|
238 |
| Financial assets designated at fair value through profit
or loss |
|
|
|
|
| Available-for-sale financial assets |
212 |
212 |
22 |
190 |
| Loans and receivables |
20,438 |
20,438 |
|
20,438 |
| Held to maturity financial assets |
|
|
|
|
| Total assets recognised relating to nonconsolidated stuctured
entities |
20,888 |
20,888 |
22 |
20,866 |
| Equity instruments issued |
|
|
|
|
| Financial liabilities held for trading |
133 |
|
|
|
| Financial liabilities designated at fair value through
profit or loss |
|
|
|
|
| Liabilities |
1,323 |
|
|
|
| Total liabilities recognises designated relating to non-consolidated
structured entities |
1,456 |
|
|
|
| Commitments given |
|
10,360 |
|
10,360 |
| Financing commitments |
|
10,357 |
|
10,357 |
| Guarantee commitments |
|
|
|
|
| Others |
|
3 |
|
3 |
| Provisions for execution risks - commitments given |
|
|
|
|
| Total commitments (net of provision) to nonconsolidated
structured entities |
|
10,360 |
|
10,360 |
| Total balance sheet relating to nonconsolidated structured
entities |
21,914 |
|
|
|
|
|
31.12.2017 |
|
|
Structured finance(1) |
|
|
Maximum loss |
| € million |
Carrying amount |
Maximum exposure to losses |
Guarantees received and other credit
enhancements |
Net exposure |
| financial assets held for trading |
62 |
62 |
|
62 |
| Financial assets designated at fair value through profit
or loss |
|
|
|
|
| Available-for-sale financial assets |
743 |
743 |
|
743 |
| Loans and receivables |
2,593 |
2,593 |
|
2,593 |
| Held to maturity finacial assets |
|
|
|
|
| Total assets recognised relating to nonconsolidated structured
entities |
3,398 |
3,398 |
|
3,398 |
| Equity instruments issued |
|
|
|
|
| Financial liabilities held for trading |
18 |
|
|
|
| Financial liabilities designated at fair value through
profit or loss |
|
|
|
|
| Liabilities |
565 |
|
|
|
| Total liabilities recognises designated relating to non-consolidated
structured entities |
583 |
|
|
|
| Commitments given |
|
1,103 |
|
1,103 |
| Financing commitments |
|
625 |
|
625 |
| Guarantee commitments |
|
478 |
|
478 |
| Others |
|
|
|
|
| Provisions for execution risks - commitments given |
|
|
|
|
| Total commitments (net of provision) to nonconsolidated
structured entities |
|
1,103 |
|
1,103 |
| Total balance sheet relating to nonconsolidated structured
entities |
2,674 |
|
|
|
(1)
Non-sponsored structured entities generate no specific risk related to the nature
of the entity. Information concerning these exposures is set out in Note 3.1 "Credit
risk" and Note "3.2 "Market risk'. These are investment funds in which the Group is
not a manager, and structured financing entities in which the Group has only granted
a loan.
MAXIMUM EXPOSURE
TO LOSS RISK
The maximum exposure to loss risk on financial instruments corresponds to the value
recognised on the balance sheet, with the exception of option sale derivatives and
credit default swaps for which the exposure corresponds to assets for the notional
amount and to liabilities for the notional amount less the mark-to-market. The maximum
exposure to loss risk on commitments given corresponds to the notional amount and
the provision for commitments given in the amount recognised on the balance sheet.
NOTE 13: EVENTS
SUBSEQUENT TO 31 DECEMBER 2018
There were no events after the reporting period.
5. STATUTORY AUDITORS'
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2018
This is a free translation into English of the Statutory Auditors' report issued
in
French and is provided solely for the convenience of Englishspeaking readers. This
report includes information specifically required by European regulations or French
law, such as information about the appointment of Statutory Auditors. This report
should be read in conjunction with, and construed in accordance with, French law and
professional auditing standards applicable in France.
OPINION
In compliance with the engagement entrusted to us by your Annual General Meetings,
we have audited the accompanying consolidated financial statements of Crédit Agricole
Corporate and Investment Bank for the year ended December 31, 2018.
In our opinion, the consolidated financial statements give a true and fair view
of
the assets and liabilities and of the financial position of the Group at 31 December
2018 and of the results of its operations for the year then ended in accordance with
International Financial Reporting Standards as adopted by the European Union.
BASIS FOR OPINION
AUDIT FRAMEWORK
We conducted our audit in accordance with professional standards applicable in
France.
We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Our responsibilities under these standards are further described in the "Responsibilities
of the Statutory Auditors relating to the audit of the consolidated financial statements"
section of our report.
INDEPENDENCE
We conducted our audit engagement in compliance with the independence rules applicable
to us, for the period from 1 January 2018 to the date of our report, and, in particular,
we did not provide any non audit services prohibited by article 5 (1) of Regulation
(EU) No 537/2014 or the French Code of Ethics for Statutory Auditors (Code de déontologie
de la profession de commissaire aux comptes)
EMPHASIS OF MATTER
Without qualifying our opinion, we draw your attention to the change in accounting
policy concerning the application as from 1 January 2018 of the new IFRS 9 "Financial
instruments" presented in Note 1.1 "Applicable standards and comparability" and the
paragraph "Financial instruments" in Note 1.2 "Accounting rules and procedures" as
well as in the other notes to the consolidated financial statements presenting quantified
data related to the impact of this change.
JUSTIFICATION
OF ASSESSMENTS - KEY AUDIT MATTERS
In accordance with the requirements of articles L.823-9 and R.823-7 of the French
Commercial Code (Code de commerce) relating to the justification of our assessments,
we inform you of the key audit matters relating to the risks of material misstatement
that, in our professional judgement, were the most significant in our audit of the
consolidated financial statements, as well as how we addressed those risks. These
matters were addressed as part of our audit of the consolidated financial statements
as a whole, and therefore contributed to the opinion we formed as expressed above.
We do not provide a separate opinion on specific items of the consolidated financial
statements.
LEGAL, TAX AND
COMPLIANCE RISKS
♦ Description
of risk
Crédit Agricole Corporate and Investment Bank is subject to judicial proceedings
or
arbitration and a number of investigations and requests for regulatory information
from different regulators. These concern in particular the Euribor/Libor and SSA Bonds
matters with authorities from various countries (USA, UK, Switzerland) and the European
Union.
A number of tax investigations are also ongoing in France and some of the countries
in which the Group operates.
Deciding whether or not to recognize a provision and the amount of that provision
requires the use of judgement, given that it is difficult to assess the outcome of
disputes or the final tax impacts of certain structural transactions.
Given its sensitivity to these assumptions, thus constituting a significant risk
of
material misstatement in the financial statements, we deemed the measurement of provisions
for legal, compliance and tax risks to be a key audit matter
The various ongoing investigations and requests for information (Euribor/ Libor,
Bonds
SSA and other indexes) are described in Note 6.15 to the consolidated financial statements.
♦ How our audit
addressed this risk
The risk of a significant outflow of funds concerns a limited number of matters
that
we monitor on a regular basis.
We gained an understanding of the procedure for measuring the risks and, where
applicable,
the provisions associated with these matters, through quarterly exchanges with management
and in particular the Legal, Tax and Compliance departments of the Group and its main
subsidiaries.
Our work consisted primarily in:
| ― |
examining the assumptions used to determine provisions based
on available information
(documentation prepared by the Legal department or legal counsel of Crédit Agricole
Corporate and Investment Bank, correspondence from regulators and minutes of Legal
Risks Committee meetings);
|
| ― |
gaining an understanding of the analyses and findings of the
Bank's legal counsel
and their responses to our requests for confirmation;
|
| ― |
as regards tax risks in particular, examining, with guidance
from our specialists,
the Company's responses submitted to the relevant authorities, as well as the risk
estimates carried out by the bank;
|
| ― |
assessing, accordingly, the level of provisioning at 31 December
2018.
|
Lastly, we examined the related disclosures provided in the notes to the consolidated
financial statements.
CREDIT RISK AND
ESTIMATE OF EXPECTED LOSSES ON PERFORMING, UNDERPERFORMING AND NONPERFORMING
LOANS IN THE CONTEXT OF THE FIRST-TIME APPLICATION OF IFRS 9
♦ Description
of risk
In accordance with IFRS 9, since 1 January 2018 the Crédit Agricole Corporate and
Investment Bank Group recognises value adjustments in respect of expected credit losses
(ECL) on loans that are performing (Bucket 1), underperforming (Bucket 2) or non-performing
(Bucket 3).
Given the significant judgement exercised by management in determining such value
adjustments and the changes resulting from the implementation of the new standard
(adaptation of the operational mechanism for calculating ECL, new information systems,
inputs, new control framework, etc.), we deemed the estimation of ECL and information
published as an annex of performing and underperforming (Buckets 1 and 2) and nonperforming
(Bucket 3) loans for financing granted to companies in the maritime and energy sectors,
both at the date of the first-time application of the new standard and at 31 December
2018, to be a key audit matter, due to an uncertain economic environment, the complexity
of identifying exposures where there is a risk of non-recovery and the degree of judgement
needed to estimate recovery flows.
The impact of the first-time application the new accounting standard IFRS 9 in
respect
of impairment losses has been recognised in equity at 1 January 2018 in the amount
of - €0.4 billion.
At 31 December 2018, value adjustments for expected losses on all eligible financial
loans amounted to €3.1 billion of which:
| ― |
€0.9 billion of value adjustments pertaining to performing and
underperforming loans
(€0.3 billion in Bucket 1 and €4.3 billion in Bucket 2);
|
| ― |
€2.2 billion of value adjustments pertaining to non-performing
loans (Bucket 3).
|
See the notes on the effects of the application of IFRS 9 at 1 January 2018 and
Note
3.1 to the consolidated financial statements.
♦ How our audit
addressed this risk
We examined the procedures implemented by the Risk Management department to categorise
loans (Bucket 1, 2 or 3) and measure the amount of recorded ECL, in order to assess
whether the estimates used were based on IFRS 9-compliant methods, and were appropriately
documented and described in the notes to the consolidated financial statements.
We tested the key controls implemented by the main entities for the annual portfolio
reviews, the updating of credit ratings, the identification of underperforming or
non-performing loans and the measurement of impairment. We also familiarised ourselves
with the main findings of the primary Group entities' specialised committees in charge
of monitoring underperforming and non-performing loans.
| ― |
asked experts to assess the methods and measurements for the
various ECL inputs and
calculation models;
|
| ― |
examined the methodology used to identify significant increases
in credit risk (SICR);
|
| ― |
tested the controls for the transfer of the data used to calculate
ECL or the reconciliations
between the bases used to calculate ECL and the accounting data;
|
| ― |
carried out independent ECL calculations on the basis of samples,
compared the calculated
amount with the recognized amount and examined the adjustments made by management
where applicable;
|
| ― |
also assessed the analyses carried out by management on Crédit
Agricole Corporate
and Investment Bank's corporate bank's exposures with a deteriorated outlook;
|
Regarding individually calculated value adjustments in Bucket 3, we:
| ― |
examined the estimates used for Crédit Agricole Corporate and
Investment Bank's impaired
significant counterparties and, on the basis of a sample of credit files, examined
the factors underlying the main assumptions used to assess the expected recovery flows,
in particular with regard to valuing collateral;
|
| ― |
Lastly, we examined the disclosures regarding credit risk hedging
provided in the
notes to the consolidated financial statements, including with respect to the impacts
of the first-time application of IFRS 9.
|
MEASUREMENT OF
CERTAIN FINANCIAL ASSETS AND LIABILITIES CLASSIFIED IN LEVEL 3 OF THE
FAIR VALUE HIERARCHY
♦ Description
of risk
Within the scope of its capital markets activities, Crédit Agricole Corporate and
Investment Bank originates, structures, sells and trades derivative financial instruments,
for corporates and financial institutions. Moreover, the issue of debt instruments,
some of which are structured, to the Group's international and domestic customers
contributes to the management of the bank's medium-and long-term refinancing.
| ― |
Derivative financial instruments are held for trading purposes
and measured at fair
value through profit or loss on the balance sheet.
|
| ― |
Structured issues are recognised in financial liabilities subject
to the fair value
through profit or loss option.
|
These instruments are classified in level 3 when their measurement requires the
use
of significant unobservable market inputs. We deemed the measurement of such instruments
to be a key audit matter, as it requires judgement from management, in particular
as regards:
| ― |
the categorisation of financial instruments according to the
fair value hierarchy;
|
| ― |
the determination of inputs unsubstantiated by observable market
data;
|
| ― |
the use of internal and non standard valuation models;
|
| ― |
the estimate of valuation adjustments designed to reflect uncertainties
related to
the models, the inputs used and counterparty and liquidity risks; and
|
| ― |
the analysis of any valuation differences with counterparties
noted in connection
with margin calls or the disposal of instruments.
|
Level 3 derivative financial instruments and structured issues are recorded in
the
balance sheet under financial assets and liabilities at fair value through profit
or loss. At 31 December 2018, derivative financial instruments recorded in the balance
sheet amounted to €1.5 billion in assets and €1.8 billion in liabilities.
Structured issues were recorded in the amount of €8.4 billion in financial liabilities
subject to the fair value through profit or loss option. See notes 3.2, 6.2 and 10.2
to the consolidated financial statements.
♦ How our audit
addressed this risk
We gained an understanding of the processes and controls put in place by Crédit
Agricole
CIB to identify, measure and recognise derivative financial instruments and structured
issues classified in level 3.
We examined certain key controls such as the independent verification of measurement
inputs and the internal approval of valuation models by the Risk Management and Permanent
Control department. We also examined the system governing the recognition of valuation
adjustments and the accounting categorisation of financial products.
With the support of audit team experts, we carried out independent valuations,
analysed
those performed by the bank and examined the assumptions, inputs, methodologies and
models used at 31 December 2018. We also assessed the main valuation adjustments recognised,
as well as the justification provided by management for the main differences observed
in margin calls and losses and/ or gains in the event of the disposal of financial
products.
SPECIFIC VERIFICATIONS
As required by legal and regulatory provisions and in accordance with professional
standards applicable in France, we have also verified the information pertaining to
the Crédit Agricole Corporate and Investment Bank Group presented in the Board of
Directors' management report.
We have no matters to report as to its fair presentation and its consistency with
the consolidated financial statements.
REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS
APPOINTMENT OF
THE STATUTORY AUDITORS
We were appointed Statutory Auditors of Crédit Agricole Corporate and Investment
Bank
by the General Meetings of Shareholders held on 30 April 2004 for PricewaterhouseCoopers
Audit and on 20 May 1997 for Ernst & Young et Autres.
At 31 December 2018, PricewaterhouseCoopers Audit and Ernst & Young et Autres
were
in the fifteenth and the twenty-second consecutive year of their engagement, respectively.
RESPONSIBILITIES
OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED
FINANCIAL STATEMENTS
Management is responsible for preparing consolidated financial statements giving
a
true and fair view in accordance with International Financial Reporting Standards
as adopted by the European Union and for implementing the internal control procedures
it deems necessary for the preparation of consolidated financial statements that are
free of material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for
assessing the Company's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern, and using the going concern basis of accounting,
unless it expects to liquidate the Company or to cease operations. The Audit Committee
is responsible for monitoring the financial reporting process and the effectiveness
of internal control and risk management systems, as well as, where applicable, any
internal audit systems, relating to accounting and financial reporting procedures.
The consolidated financial statements were approved by the Board of Directors.
RESPONSIBILITIES
OF THE STATUTORY AUDITORS RELATING TO THE AUDIT OF THE CONSOLIDATED
FINANCIAL STATEMENTS
OBJECTIVE AND
AUDIT APPROACH
Our role is to issue a report on the consolidated financial statements. Our objective
is to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free of material misstatement. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with professional
standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions taken
by users on the basis of these consolidated financial statements. As specified in
article L.823-10-1 of the French Commercial Code, our audit does not include assurance
on the viability or quality of the Company's management.
As part of an audit conducted in accordance with professional standards applicable
in France, the Statutory Auditors exercise professional judgement throughout the audit.
They also:
| ― |
identify and assess the risks of material misstatement in the
consolidated financial
statements, whether due to fraud or error, design and perform audit procedures in
response to those risks, and obtain audit evidence considered to be sufficient and
appropriate to provide a basis for their opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control;
|
| ― |
obtain an understanding of the internal control procedures relevant
to the audit in
order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the internal control;
|
| ― |
evaluate the appropriateness of accounting policies used and
the reasonableness of
accounting estimates made by management and the related disclosures in the notes to
the consolidated financial statements;
|
| ― |
assess the appropriateness of management's use of the going concern
basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Company's ability to
continue as a going concern. This assessment is based on the audit evidence obtained
up to the date of the audit report. However, future events or conditions may cause
the Company to cease to continue as a going concern. If the Statutory Auditors conclude
that a material uncertainty exists, they are required to draw attention in the audit
report to the related disclosures in the consolidated financial statements or, if
such disclosures are not provided or are inadequate, to issue a qualified opinion
or a disclaimer of opinion;
|
| ― |
evaluate the overall presentation of the consolidated financial
statements and assess
whether these statements represent the underlying transactions and events in a manner
that achieves fair presentation;
|
| ― |
obtain sufficient appropriate audit evidence regarding the financial
information of
the entities or business activities within the Group to express an opinion on the
consolidated financial statements. The Statutory Auditors are responsible for the
management, supervision and performance of the audit of the consolidated financial
statements and for the opinion expressed thereon.
|
REPORT TO THE
AUDIT COMMITTEE
We submit a report to the Audit Committee which includes, in particular, a description
of the scope of the audit and the audit programme implemented, as well as the results
of our audit. We also report any significant deficiencies in internal control that
we have identified regarding the accounting and financial reporting procedures.
Our report to the Audit Committee includes the risks of material misstatement that,
in our professional judgement, were the most significant for the audit of the consolidated
financial statements and which constitute the key audit matters that we are required
to describe in this report.
We also provide the Audit Committee with the declaration provided for in article
6
of Regulation (EU) No 537/2014, confirming our independence within the meaning of
the rules applicable in France, as defined in particular in articles L.822-10 to L.822-14
of the French Commercial Code and in the French Code of Ethics for Statutory Auditors.
Where appropriate, we discuss any risks to our independence and the related safeguard
measures with the Audit Committee.
Neuilly sur Seine and Paris, 01 april 2019
PricewaterhouseCoopers
Audit
The
Statutory Auditors
French
original signed by
Anik
Chaumartin
Laurent
Tavernier
ERNST
& YOUNG and others
Olivier
Durand
Matthieu
Prechoux
7. PARENT-COMPANY
FINANCIAL STATEMENTS AT 31 DECEMBER 2018
Approved by the
Board of Directors on 11 February 2019 and submitted for approval
by the Ordinary General meeting of 7 May 2019.
| € 1,272 M NET INCOME |
€ 3,814 M NET BANKING INCOME |
| € 481,393 M TOTAL BALANCE SHEET |
|
1. CRÉDIT AGRICOLE
CIB (S.A.) FINANCIAL STATEMENTS
1.1 ASSETS
| € million |
Notes |
31.12.2018 |
31.12.2017 |
| Cash money market and interbank items |
|
138,980 |
122,528 |
| Cash due from central banks |
|
42,183 |
29,175 |
| Treasury bills ans similar securities |
4; 4.2; 4.3; 4.4 |
25,772 |
23,167 |
| Loans and receivables to credit institutions |
2 |
71,025 |
70,186 |
| Loans and receivables to customers |
3.1; 3.2; 3.3; 3.4 |
161,986 |
145,291 |
| Portfolio securities |
|
30,077 |
30,916 |
| Bonds and other fixed income securities |
4; 4.2; 4.3; 4.4 |
25,572 |
23,119 |
| Equities and other equity variables income securities |
4; 4.2 |
4,505 |
7,797 |
| Fixed assets |
|
6,731 |
6,527 |
| Equity investments and other long-term equity investments |
5; 5.1; 6 |
591 |
570 |
| Investments in subsidiaries and affiliates |
5; 5.1; 6 |
5,846 |
5,729 |
| Intangible assets |
6 |
192 |
139 |
| Property, plant and equipment |
6 |
102 |
89 |
| Treasury shares |
|
|
|
| Accruals, prepayments and sundry assets |
|
143,619 |
156,550 |
| Other assets |
7 |
43,177 |
49,103 |
| Accruals and prepayments |
7 |
100,442 |
107,447 |
| Total assets |
|
481,393 |
461,812 |
1.2 LIABILITIES
| € million |
Notes |
31.12.2018 |
31.12.2017 |
| Cash money markets and interbank items |
|
74,687 |
74,790 |
| Due to central banks |
|
873 |
1,585 |
| Due to credit institutions |
9 |
73,814 |
73,205 |
| Due to customers |
10.1; 10.2; 10.3 |
167,764 |
138,770 |
| Debts securities |
11 |
43,282 |
40,464 |
| Accruals, deferred income and sundry liabilities |
|
170,158 |
183,064 |
| Other liabilities |
12 |
68,953 |
69,758 |
| Accruals and deferred income |
12 |
101,205 |
113,306 |
| Provisions and subordinated debt |
|
11,570 |
10,756 |
| Provisions |
13 |
3,181 |
3,202 |
| Subordinated debt |
14 |
8,389 |
7,554 |
| Fund for general banking risks (FGBR) |
|
|
105 |
| Equity (excluding FGBR) |
15 |
13,932 |
13,863 |
| Share capital |
|
7,852 |
7,852 |
| Share premium |
|
1,573 |
1,573 |
| Reserves |
|
788 |
657 |
| Revaluation adjustments |
|
|
|
| Regulated provisions and investment subsidies |
|
|
|
| Retained earnings (2) |
|
2,447 |
1,168 |
| Net income for the financial year (1) |
|
1,272 |
2,613 |
| Total equity and liabilities |
|
481,393 |
461,812 |
(1)
An error was corrected during the 2017 financial year. It relates to a regularisation
of the staggering of up-front fees, received and paid, relating to the purchase and
sale of CDS recognised as hedging, over the course of several prior financial years.
Correcting this error has a positive effect of €416 million on the net income for
the 2017 financial year, excluding the tax effect of this correction.
(2)
The application of the new model for provisioning credit risk on healthy loans and
receivables, intended to transpose the new credit risk provisioning model according
to the IFRS 9 approach to estimating ELs represent an impact of +€33 million on opening
shareholders' equity (retained earnings) at 1 January 2018.
1.3 OFF-BALANCE
SHEET
| € million |
31.12.2018 |
31.12.2017 |
| Commitments given |
277,708 |
253,477 |
| Financing commitments |
155,132 |
137,370 |
| Commitments to credit institutions |
21,511 |
20,074 |
| Commitments to customers |
133,621 |
117,296 |
| Guarantee commitments (1) |
65,413 |
64,183 |
| Commitments to credit institutions |
20,417 |
15,244 |
| Commitments to customers |
44,996 |
48,939 |
| Commitments on securities (1) |
18,026 |
17,559 |
| Other commitments given (1) |
39,137 |
34,365 |
| Commitments received |
190,182 |
150,869 |
| Financing commitments |
25,571 |
19,930 |
| Commitments to credit institutions |
16,918 |
14,540 |
| Commitments to customers |
8,653 |
5,390 |
| Guarantee commitments |
134,011 |
105,596 |
| Commitments to credit institutions |
7,372 |
6,119 |
| Commitments to customers |
126,639 |
99,477 |
| Commitments on securities (2) |
21,346 |
17,853 |
| Other commitments received |
9,254 |
7,490 |
(1)
Including €8,231 million in commitments given to Crédit Agricole S.A. at 31.12.2018.
(2)
Including €131 million in financing commitments received from Crédit Agricole S.A.
at 31.12.2018.
Off-balance sheet
items: Other information
Foreign exchange transactions and amounts payable in foreign currency: Note 18.
Transactions involving forward financial instruments: Notes 19; 19.1; 19.2 and
19.3
1.4 INCOME STATEMENT
| € million |
Notes |
2018 |
2017 |
| Interest and similar income |
20; 21 |
7,593 |
5,605 |
| Interest and similar expenses |
20 |
(6,814) |
(4,365) |
| Income from variable-income securities |
21 |
286 |
408 |
| Fee and commission income |
22; 22.1 |
925 |
947 |
| Fee and commission expenses |
22; 22.1 |
(406) |
(346) |
| Net gain/(loss) on trading book |
23 |
2,151 |
2,323 |
| Net gain/(loss) on investment portfolios |
24 |
12 |
(15) |
| Other banking income (1) |
|
134 |
75 |
| Other banking expenses (1) |
|
(67) |
(45) |
| Revenues |
|
3,814 |
4,587 |
| Operating expenses |
|
(2,383) |
(2,272) |
| Personnal costs |
25.1; 25.2 |
(1,372) |
(1,314) |
| Other operating expenses |
25.3 |
(1,011) |
(958) |
| Depreciation, amortization and impairement of property,
plant and equipment and intangible
assets
|
|
(64) |
(69) |
| Gross operating income |
|
1,367 |
2,246 |
| Cost of risk |
26 |
195 |
(300) |
| Net operating income |
|
1,562 |
1,946 |
| Net gain/(loss) on fixed assets |
27 |
20 |
1,181 |
| Pre-tax income on ordinary activities |
|
1,582 |
3,127 |
| Net extraordinary items |
|
(0) |
0 |
| Income tax charge |
28 |
(415) |
(514) |
| Net allocation to FGBR and regulated provisions |
|
105 |
0 |
| Net income for the financial year |
|
1,272 |
2,613 |
(1)
An error was corrected during the 2017 financial year. It relates to a regularisation
of the staggering of up-front fees, received and paid, relating to the purchase and
sale of CDS recognised as hedging, over the course of several prior financial years.
Correcting this error has a positive effect of €416 million on the net income for
the 2017 financial year, excluding the tax effect of this correction.
2. NOTES TO THE
PARENT-COMPANY FINANCIAL STATEMENTS
NOTE 1: ACCOUNTING
POLICIES AND PRINCIPLES
Crédit Agricole CIB prepares its financial statements in accordance with the accounting
principles applicable to banks in France.
The presentation of the financial statements of Crédit Agricole CIB complies with
the provisions of ANC Regulation 2014-07 of 26 November 2014, which, for periods beginning
on or after 1 January 2015, combines in a single regulation all accounting standards
applicable to credit institutions, pursuant to established law.
Changes to accounting policies and the presentation of financial statements compared
to the previous financial year concern the following:
| Regulations |
Date published by the French government |
Date of first-time application:
financial years from |
| ANC Regulation No. 2017-01 on the General Chart of Accounts
regarding the accounting
treatment of mergers.
|
30.12.2017 |
2018 |
| ANC Regulation No. 2018-01 on changes in accounting policies
and estimates and the
correction of errors.
|
20.04.2018 |
2018 |
The application of these new regulations had no major impact on net income and
the
net position of Crédit Agricole CIB over the period.
At 1 st January 2018, a change was made to the accounting policies,
in the absence of any
new ANC regulations.
This change corresponds to a new model of credit risk provisioning on healthy loans
and receivables, intended to transpose the new credit risk provisioning model according
to the IFRS 9 approach for estimating ELs.
The scope of application of this new provisioning model is outstanding loan amounts
(excluding outstanding leasing amounts) as well as financing commitments and guarantee
commitments. As part of the IFRS 9 project, the Group took the decision in principle
to align the rules it applies to determine the credit risk impairment in the individual
financial statements in French standards with those used in the IFRS consolidated
financial statements. This alignment in principle remains compatible with the application
of existing standards within the French framework:
| ― |
the principle of prudence, defined in Article L123-20 of the
French Commercial Code
and contained in Article 121-4 of regulation 2014-03 (PCG) naturally justifies provisioning,
including on the basis of ELs;
|
| ― |
Article 1121-3 of regulation 2014-07 on provisions for liabilities
(item 7) allows
for provisions to be made, on the basis of "events that have occurred or are ongoing",
for loans and receivables which have undergone significant deterioration of their
credit risk or which are high-risk;
|
| ― |
Article 323-6 of regulation 2014-03 (PCG) on the valuation of
liabilities allows "future
events" to be considered when estimating provisions (similar to the forward-looking
component);
|
| ― |
finally, regulation 2018-01, which amends Regulation 2014-03,
allows the company to
change the accounting policy.
|
The impacts of this alignment are recorded in total opening equity.
1.1 Loans and
financing commitments
Loans and receivables to credit institutions, Crédit Agricole CIB Group entities
and
customers are governed by Articles 2211-1 to 2251-13 (Part 2 "Accounting Treatment
of Credit Risk" of Book II "Special Transactions") of ANC Regulation 2014-07 of 26
November 2014.
They are presented in the financial statements according to their initial term
or
their nature:
| ― |
demand and time deposits for credit institutions;
|
| ― |
current accounts, time loans and advances for Crédit Agricole
internal transactions;
|
| ― |
trade receivables and other loans and receivables to customers.
|
In accordance with regulations, the customers category also includes transactions
with financial customers.
Subordinated loans and repurchase agreements (represented by certificates or securities)
are included under the various categories of loans and receivables according to counterparty
type (interbank, Crédit Agricole, customers).
Amounts receivable are recognised on the balance sheet at face value.
Pursuant to Article 213 1-1 of ANC Regulation 2014-07 of 26 November 2014, the
fees
and commissions received and the marginal transaction costs borne are deferred over
the effective term of the loan and are thus included in the outstanding amount of
the relevant loan.
Accrued interest is recognised on the balance sheet under the appropriate category
of loans and advances and booked to the income statement as interest income.
Financing commitments recognised off-balance sheet represent irrevocable commitments
to cash advances and guarantee commitments that have not resulted in fund movements.
Application of ANC regulation 2014-07 of 26 November 2014 leads the entity to recognise
loans and receivables at risk of non-payment pursuant to the rules set out in the
paragraphs below.
External and/or internal rating systems are used to help assess the level of credit
risk.
Loans and financing commitments are broken down between loans and receivables considered
healthy and those considered doubtful.
HEALTHY LOANS
Unless receivables are classified as doubtful, they are considered healthy and
continue
to be carried under their original classification.
CREDIT RISK PROVISIONS
ON HEALTHY LOANS AND RECEIVABLES
Furthermore, without waiting for loans and receivables to become doubtful, and
from
the initial accounting date of the financial instruments, Crédit Agricole CIB also
records, on the liabilities side of its balance sheet the expected credit losses over
the coming twelve months (loans and receivables classified as healthy) and/or over
the lifetime of the financial instrument when the credit quality of the loan or receivable
has deteriorated significantly (loans and receivables classified as deteriorated).
Allocation to, and reversals of, credit risk provisions on healthy loans and receivables
are recorded under cost of risk.
These provisions are determined as part of a specific monitoring process and are
based
on estimates reflecting the development of the credit risk level on the initial accounting
date and the date the financial statements are prepared.
DOUBTFUL AND IRRECOVERABLE
LOANS
Loans and receivables of all kinds, even those which are guaranteed, are classified
as doubtful if they carry an identified credit risk arising from one of the following
events:
| ― |
the loan or advance is at least three months in arrears;
|
| ― |
the borrower's financial position is such that an identified
risk exists regardless
of whether the loan or advance is in arrears;
|
| ― |
the bank and borrower are in legal proceedings.
|
For overdrafts, the age of the overdue amount is calculated as from the date on
which
the borrower has exceeded an authorised limit that the bank has brought to its attention,
has been notified that the outstanding overdraft exceeds a limit set by the bank as
part of its internal control procedures, or has drawn sums without an overdraft authorisation.
Subject to certain conditions, in lieu of the above criteria, the establishment
may
calculate the age of the overdue amount from the date on which the bank has issued
a demand for total or partial repayment by the borrower.
Crédit Agricole CIB makes the following distinction between irrecoverable loans
and
doubtful loans:
♦ Doubtful loans
All doubtful loans which do not fall into the irrecoverable loans category are
classified
as doubtful loans.
♦ Irrecoverable
loans
Irrecoverable loans are those for which the prospects of recovery are highly impaired
and which are likely to be written off in time. The classification as a doubtful loan
and receivable may be abandoned once the credit risk has been definitively lifted
and when regular payments have resumed for the amounts corresponding to the original
contractual instalments. In this case, the loan or receivable is again carried in
healthy loans and receivables.
IMPAIRMENT RESULTING
FROM CREDIT RISK ON DOUBTFUL LOANS
Once a loan is classified as doubtful, an impairment loss is deducted by Crédit
Agricole
CIB from the asset in an amount equal to the probable loss. These impairment losses
represent the difference between the carrying amount of the receivable and estimated
future cash flows discounted at the applicable rate, taking into account the borrower's
financial condition, its business prospects and any guarantees, after deducting the
cost of enforcing such guarantees.
Probable losses in respect of off-balance sheet commitments are covered by provisions
recognised as liabilities.
ACCOUNTING TREATMENT
OF IMPAIRMENT LOSSES
Impairment provisions and reversals for non-recovery risks on doubtful loans and
receivables
are recorded in cost of risk, and the increase in the carrying amount resulting from
the reversal of impairment losses as a result of the passage of time is recognised
in the interest margin. In accordance with Article 2231-3 of ANC regulation 2014-07,
the Group has chosen to record the increase in the carrying amount linked to the impairment
reversal due to the passage of time under cost of risk.
WRITE-OFFS
Decisions as to when to write off are taken on the basis of expert opinion. Crédit
Agricole CIB determines this in conjunction with its Risk Management department, having
regard to its business knowledge.
Loans and receivables which have become irrecoverable are recorded as losses, and
the corresponding impairments are reversed.
COUNTRY RISKS
Country risks (or risks on international commitments) consist of "the total amount
of unimpaired loans, both on and off-balance sheet, carried by an institution directly
or via hive-off vehicles, involving private or public debtors residing in the countries
identified by the French Regulatory and Resolution Supervisory Authority (ACPR), or
where settlement thereof depends on the position of public or private debtors residing
in those countries" (French Banking Commission memo dated 24 December 1998).
Where these receivables are not classified as doubtful, they continue to be carried
under their original classification. The amount of the "Country Risks" provisions
recognised as a liability in the Crédit Agricole CIB balance sheet stood at €400 million
at 31 December 2018, against €672 million at 31 December 2017.
RESTRUCTURED LOANS
These are loans to counterparties in financial difficulty, such that the credit
institution
alters their initial characteristics (term, interest rate, etc.) to allow the counterparties
to honour the repayment schedule.
They consist of loans classified as doubtful and healthy loans at the date they
are
restructured.
Restructured loans do not include loans whose characteristics have been renegotiated
on a commercial basis with counterparties not showing any insolvency problems: the
reduction of future flows granted to a counterparty, or the postponing of these flows
as part of a restructuring, results in the recognition of a discount. It represents
future loss of cash flow discounted at the original effective interest rate. It is
equal to the difference between:
| ― |
the nominal value of the loans; and
|
| ― |
the sum of theoretical future cash flows from the restructured
loan, discounted at
the original effective interest rate (defined at the date of the financing commitment).
|
The discount recognised when a loan is restructured is recorded under cost of risk.
Loans restructured due to the debtor's financial position are rated in line with
the
Basel rules and are impaired according to the estimated credit risk. If, after a loan
has returned to healthy status, the debtor again fails to meet the instalments, the
restructured loans and receivables are immediately reclassified as doubtful. At 31
December 2018, restructured loans and receivables held by Crédit Agricole CIB amounted
to € 3,502 million, compared to €5,167 million at 31 December 2017.
1.2 Securities
portfolio
The rules on recognition of securities transactions are defined by Articles 2311-1
to 2391-1 (Part 3 "Recognition of Securities Transactions" of Book II "Special Transactions")
and Articles 2211-1 to 2251-13 (Part 2 "Accounting Treatment of Credit Risk" of Book
II "Special Transactions") of ANC Regulation 2014-07 of 26 November 2014 for the determination
of credit risk and the impairment of fixed income securities.
These securities are presented in the financial statements according to their asset
class: treasury bills (treasury bonds and similar securities), bonds and other fixed
income securities (negotiable debt securities and interbank market instruments) and
equities and other variable-income securities.
They are classified in portfolios defined by regulation (trading, short term investment,
long term investment, medium term portfolio, other long term equity investments and
investments in subsidiaries and affiliates), depending on the initial intention for
holding the securities as identified in the accounting IT system at the time they
were acquired.
TRADING SECURITIES
These are securities that were originally:
| ― |
bought with the intention of selling them in the near future,
or sold with the intention
of repurchasing them in the near future;
|
| ― |
or held by the bank as a result of its market-making activity.
The classification
of these securities as trading securities depends on the effective turnover of the
securities and on a significant trading volume taking into account market opportunities.
|
These securities must be tradable on an active market and resulting market prices
must represent real transactions regularly undertaken in the market on an arm's length
basis.
Trading securities also include:
| ― |
securities bought or sold as part of specialised management of
the trading portfolio,
including forward financial instruments, securities or other financial instruments
that are managed collectively and on which there is an indication of recent short-term
profit taking;
|
| ― |
securities on which there is a commitment to sell as part of
an arbitrage transaction
on an organised exchange for financial instruments or similar market.
|
Except as provided in accordance with Articles 2381-1 to 2381-5 (Part 3 "Recognition
of Securities Transactions" of Book II "Special Transactions") of ANC Regulation 2014-07
of 26 November 2014, trading securities may not be reclassified into another accounting
category. They continue to be presented and measured as trading securities until they
are removed from the balance sheet after being sold, fully redeemed or written off.
Trading securities are recognised on the date they are purchased in the amount
of
their purchase price, excluding transaction expenses and including accrued interest.
Liabilities relating to securities sold short are recognised on the liabilities
side
of the seller's balance sheet in the amount of the selling price excluding incidental
purchase costs.
At each period-end, securities are measured at the most recent market price. The
overall
amount of differences resulting from price changes is taken to profit and loss and
recorded in "Net gain/(loss) on trading book".
AVALAIBLE FOR
SALE SECURITIES
This category consists of securities that do not fall into any other category.
The securities are recorded at their purchase price, excluding incidental purchase
costs.
♦ Bonds and other
fixed income securities
These securities are recognised at acquisition cost including interest accrued
at
the acquisition date. The difference between the purchase price and the redemption
value is spread over the remaining life of the security on an actuarial basis.
Income is recorded in the income statement under "Interest and similar income from
bonds and other fixed income securities".
♦ Equities and
other variable-income securities
Equities are recognised on the balance sheet at their purchase price including
transaction
expenses. The associated dividends are recorded as income under "Income from variable-income
securities".
At each reporting date, short term investment securities are measured at the lesser
acquisition cost and market value. If the current value of an item or a homogeneous
set of securities (calculated from market prices at the reporting date, for example)
is lower than its carrying amount, an impairment loss is recorded for the unrealised
loss without being offset against any gains recognised on other categories of securities.
Gains from hedging within the meaning of Article 2514-1 of ANC Regulation 2014-07
of 26 November 2014, in the form of purchases or sales of forward financial instruments,
are factored in for the purposes of calculating impairment losses. Potential gains
are not recorded.
Impairment intended to take into account counterparty risk and recognised under
cost
of risk is booked on fixed income securities as follows:
| ― |
in the case of listed securities, impairment is based on market
value, which intrinsically
reflects credit risk. However, if Crédit Agricole CIB has specific information on
the issuer's financial position that is not reflected in the market value, a specific
impairment loss is recorded;
|
| ― |
in the case of unlisted securities, impairment is recorded in
the same way as on loans
and receivables due from customers based on identified probable losses (see Note 2.1
Loans and financing commitments - Impairment resulting from identified credit risk).
|
Sales of securities are deemed to take place on a first-in, first-out basis.
Impairment charges, write-backs and disposal gains or losses on available-for-sale
securities are recorded under "Net gain/(loss) from investment portfolios and similar".
Income from equities and other variable-income securities is recorded on the income
statement under "Income from variable-income securities".
LONG-TERM INVESTMENT
SECURITIES
Long term investment securities are fixed income securities with a fixed maturity
date that have been acquired or transferred to this category with the manifest intention
of holding them until maturity.
This category only includes securities for which Crédit Agricole CIB has the necessary
financial ability to continue holding them until maturity and that are not subject
to any legal or other restriction that could interfere with its intention to hold
them until maturity. Long term investment securities are recognised at their purchase
price, including acquisition costs and accrued interest.
The difference between the purchase price and the redemption price is spread over
the remaining life of the security.
Impairment is not booked for long term investment securities if their market value
falls below cost. On the other hand, if the impairment arises from a risk relating
specifically to the issuer of the security, impairment is recorded under "Cost of
risk", in accordance with Part 2 "Accounting Treatment of Credit Risk" of Book II
"Special Transactions" of ANC Regulation 2014-07 of 26 November 2014; it is recorded
in the "Cost of risk" item.
In the case of the sale or reclassification to another category of long term investment
securities representing a material amount, the reporting entity is no longer authorised
to classify securities previously bought or to be bought as long term investment securities
during the current financial year and the two subsequent financial years, in accordance
with Article 2341-2 of ANC Regulation 2014-07 of 26 November 2014.
MEDIUM-TERM PORTFOLIO
SECURITIES
In accordance with Articles 2351-2 to 2352-6 (Part 3 "Recognition of Securities
Transactions"
of Book II "Special Transactions") of ANC Regulation 2014-07 of 26 November 2014,
these securities are "investments made on a normal basis, with the sole aim of securing
a capital gain in the medium term, with no intention of investing in the issuer's
business on a long-term basis or taking an active part in its management".
Securities can only be included in this category if the activity is carried out
to
a significant extent and on an ongoing basis within a structured framework and gives
the reporting entity a recurring return mainly in the form of capital gains on disposals.
Crédit Agricole CIB meets these conditions and some of its securities can be classified
in this category.
Medium term portfolio securities are recorded at purchase price, including transaction
expenses. They are recognised at the end of the reporting period at the lower of historical
cost or value in use, which is determined on the basis of the issuer's general outlook
and the estimated remaining time horizon for holding the securities. For listed companies,
value in use is generally the average quoted price over a sufficiently long period
of time, depending on the estimated time horizon for holding the securities, to mitigate
the impact of substantial fluctuations in stock prices.
Impairment losses are booked for any unrealised losses calculated for each line
of
securities, and are not offset against any unrealised gains. Unrealised losses are
recorded under "Net gains or losses on short term investment portfolios" along with
impairment losses and reversals on these securities.
Unrealised gains are not recognised.
INVESTMENTS IN
SUBSIDIARIES AND AFFILIATES, EQUITY INVESTMENTS AND OTHER TERM EQUITY
INVESTMENTS
| ― |
Investments in subsidiaries and affiliates are investments in
companies that are under
exclusive control and that are or are liable to be fully consolidated into a given
group that can be consolidated.
|
| ― |
Equity investments are investments (other than investments in
subsidiaries and affiliates),
of which the long term ownership is judged beneficial to the reporting entity, in
particular because it allows it to exercise influence or control over the issuer.
|
| ― |
Other long term equity investments consist of securities held
with the intention of
promoting long term business relations by creating a special relationship with the
issuer, but with no influence on the issuer's management due to the small percentage
of voting rights held.
|
Investments in subsidiaries and affiliates and equity investments are recognised
at
their purchase price, including transaction expenses, in accordance with CRC Regulation
2008-07.
Other long-term securities are recognised at purchase price, including transaction
expenses.
At the reporting date, the value of these securities is measured individually,
based
on value in use, and they are recorded on the balance sheet at the lesser of their
historical cost or value in use. Value in use represents the price the reporting entity
would be prepared to pay to acquire these securities if it had to buy them having
regard to its reasons for holding them.
Value in use may be estimated on the basis of various factors such as the issuer's
profitability and prospective profitability, its equity, the economic environment,
the average share price in the preceding months or the mathematical value of the security.
When value in use is lower than historical cost, impairment losses are booked for
these unrealised gains and are not offset against any unrealised gains.
Impairment losses and reversals and disposal gains or losses on these securities
are
recorded under "Net gains (losses) on fixed assets".
MARKET PRICE
The market price at which the various categories of securities are measured is
determined
as follows:
| ― |
securities traded on an active market are measured at the latest
price;
|
| ― |
if the market on which the security is traded is not or no longer
considered active
or if the security is unlisted, Crédit Agricole CIB determines the likely value at
which the security concerned would be traded using valuation techniques. Firstly,
these techniques take into account recent transactions carried out in normal competition
conditions. If required, Crédit Agricole CIB uses valuation techniques commonly used
by market participants to price these securities, when it has been demonstrated that
these techniques provide reliable estimates of prices obtained in actual market transactions.
|
RECORDING DATES
Crédit Agricole CIB records securities classified as long term investment securities
on the settlement date. Other securities, regardless of type or classification, are
recognised on the trading date.
SECURITIES SOLD/BOUGHT
UNDER REPURCHASE AGREEMENTS
Securities sold under repurchase agreements are kept on the balance sheet. The
amount
received, representing the liability to the buyer, is recorded as a liability. Securities
bought under repurchase agreements are not recorded on the balance sheet, but the
amount paid, representing the receivable from the seller, is recorded as an asset
on the balance sheet.
The corresponding income and expenses are taken to profit and loss on a prorate
basis.
Securities sold under repurchase agreements are subject to the accounting principles
corresponding to the portfolio from which they originate.
SECURITIES LOANED
AND BORROWED
In the accounts of the lender, a receivable is recorded in the balance sheet representing
the market price of the loaned securities on the date of the loan, in place of the
loaned securities. At each period end, the receivable is valued using the rules applicable
to loaned securities, including the recognition of accrued interest on available-for-sale
securities and held-to-maturity securities. In the accounts of the borrower, the security
is recorded as an asset under trading securities at the market price prevailing on
the date the security was borrowed. A liability to the lender is recorded on the balance
sheet under "Liabilities relating to stock lending transactions". At each period-end,
securities are measured at the most recent market price.
RECLASSIFICATION
OF SECURITIES
In accordance with Articles 2381-1 to 2381-5 (Part 3 "Recognition of Securities
Transactions"
of Book II "Special Transactions") of ANC Regulation 2014-07 of 26 November 2014,
the following securities reclassifications are allowed:
| ― |
from "trading portfolio" to "long term investment portfolio"
or "short term investment
portfolio" in the case of exceptional market conditions or, for fixed income securities
that are no longer tradable in an active market and if the entity has the intention
and ability to hold the securities for the foreseeable future or until maturity;
|
| ― |
from "short term investment portfolio" to "long term investment
portfolio" in the
case of exceptional market conditions or for fixed income securities that are no longer
tradable in an active market.
|
In 2018, Crédit Agricole CIB did not make any reclassifications as allowed by ANC
Regulation 2014-07 of 26 November 2014.
1.3 Fixed assets
Crédit Agricole CIB applies ANC Regulation 2014-03 of 5 June 2014 relating to the
depreciation, amortisation and impairment of assets.
Crédit Agricole CIB applies component accounting for all of its property, plant
and
equipment. In accordance with this method, the depreciable base takes account of the
potential remaining value of property, plant and equipment. ANC Regulation 2015-06
changes the way in which technical merger losses are recognised on the balance sheet
and monitored in the financial statements. Losses are no longer required to be comprehensively
and systematically recognised under "Goodwill"; they must be recognised in the balance
sheet depending on asset items to which they are allocated as "Other property, plant
& equipment, intangible assets and financial assets, etc.". The loss is amortised,
impaired and written off in the same way as the underlying asset.
The acquisition cost of fixed assets includes the purchase price plus any incidental
expenses, namely expenses directly or indirectly incurred in connection with bringing
the asset into service or "into inventory".
Land is recorded at acquisition cost.
Buildings and equipment are recorded at acquisition cost, less accumulated depreciation,
amortisation and impairment losses since the time they were placed in service.
Purchased software is measured at purchase price less accumulated depreciation,
amortisation
and any impairment losses since acquisition.
Proprietary software is measured at cost less accumulated depreciation, amortisation
and impairment losses booked since completion.
Intangible assets other than software, patents and licences are not amortised.
They
may be subject to impairment.
Fixed assets are depreciated over their estimated useful lives. The following components
and depreciation periods have been adopted by Crédit Agricole CIB following the application
of component accounting for fixed assets. These depreciation periods are adjusted
according to the type of asset and its location:
| Component |
Depreciation period |
| Land |
Not depreciable |
| Structural works |
30 to 80 years |
| Non-structural works |
8 to 40 years |
| Plant and equipment |
5 to 25 years |
| Fixtures and fittings |
5 to 15 years |
| Computer equipment |
4 to 7 years (accelerated or straight-line) |
| Special equipment |
4 to 5 years (accelerated or straight-line) |
Based on available information on the value of its fixed assets, Crédit Agricole
CIB
has concluded that impairment testing would not lead to any change in the existing
depreciable base.
1.4 Amounts due
to customers and credit institutions
Amounts due to credit institutions, to Crédit Agricole entities and to customers
are
presented in the financial statements according to their initial term or their nature:
| ― |
demand and time deposits for credit institutions;
|
| ― |
current accounts, time loans and advances for Crédit Agricole
internal transactions;
|
| ― |
special savings accounts and other amounts due to customers (notably
including financial
customers).
|
Repurchase agreements (represented by certificates or securities) are included
under
these various headings, according to counterparty type.
Accrued interest on these deposits is recognised under accrued interest and taken
to profit and loss.
1.5 Debt securities
Debt securities are presented according to their form: interest-bearing notes,
interbank
market instruments, negotiable debt securities and bonds, excluding subordinated securities,
which are classified in liabilities under "Subordinated debt".
Accrued interest but not yet due is recognised under accrued interest and taken
to
profit and loss.
Issue or redemption premiums on bonds are amortised over the maturity period of
each
bond. The corresponding charge is recorded under "Interest and similar expenses on
bonds and other fixed income securities".
Redemption premiums can be amortised in two ways:
| ― |
based on accrued interest on a prorata basis for bonds issued
before 1 st January 1993, or for those with a redemption premium of less
than 10% of the issue
price; or
|
| ― |
on an actuarial basis for debt issued after 1 st January
1993 with a redemption premium of more than 10% of the issue price.
|
Crédit Agricole CIB also amortises borrowing expenses in its parent company's financial
statements.
Fee and commission expenses on financial services paid to the Regional Banks are
recognised
as expenses under "Fee and commission expenses".
1.6 Provisions
Crédit Agricole CIB applies ANC Regulation 2014-03 of 5 June 2014 for the recognition
and measurement of provisions. Provisions include provisions relating to financing
commitments, retirement and early retirement liabilities, litigation and various risks.
The provisions also include country risks. All these risks are reviewed quarterly.
Provisions are set aside for country risks following an analysis of the types of
transactions,
the term of commitments, their form (receivables, securities, market products) as
well as country quality. Crédit Agricole CIB partially hedges provisions on these
foreign currency-denominated receivables by buying foreign currency, to limit the
impact of changes in foreign exchange rates on provision levels.
1.7 Fund for general
banking risk (FGBR)
In accordance with Fourth European Directive and CRBF Regulation 90-02 of 23 February
1990 as amended relating to capital, funds for general banking risks are constituted
by Crédit Agricole CIB, at the discretion of its management, to meet any charges or
risks relating to banking operations but whose incidence is not certain. Provisions
are released to cover any incidence or extinction of these risks during a given period.
1.8 Transactions
on forward financial instruments and options
Hedging and market transactions on forward interest rate, foreign exchange or equity
instruments are recorded in accordance with the provisions of Part 5 "Financial Futures"
of Book II "Special Transactions" of ANC Regulation 2014-07 of 26 November 2014.
Commitments relating to these transactions are recorded off-balance sheet at the
par
value of the contracts: this amount represents the volume of pending transactions.
Gains or losses relating to these transactions are recorded on the basis of the
type
of instrument and the strategy used.
HEDGING TRANSACTIONS
Gains or losses realised on hedging transactions (category "b" Article 2522-1 of
ANC
Regulation 2014-07) are recorded on the income statement symmetrically with the recognition
of income and expenses on the hedged item and under the same accounting heading.
Income and expenses relating to forward financial instruments used for hedging
and
managing Crédit Agricole S.A.'s overall interest rate risk (category "c" Article 2522-1
of ANC Regulation 2014-07) are recorded prorata temporis under "Interest and similar
income (expenses) - Net gains (losses) on macro- hedging transactions". Unrealised
gains and losses are not recorded.
MARKET TRANSACTIONS
Market transactions include:
| ― |
isolated open positions (category "a" Article 2522-1 of ANC Regulation
2014-07)
|
| ― |
specialised management of a trading portfolio (category "d" Article
2522 of ANC Regulation
2014-07);
|
| ― |
instruments negotiated on an organised, similar market, over
the counter or includes
in a trading portfolio - in the sense of the regulation ANC 2014-07.
|
They are measured in reference to their market value on the closing date.
If there is an active market, the instrument is stated at the quoted price on that
market. In the absence of an active market, fair value is determined using internal
valuation techniques and models. When the instruments are valued at market value,
this is determined:
| ― |
on the basis of available prices, if there is an active market;
|
| ― |
using internal methodologies and valuation models, if there is
no active market.
|
INTEREST RATE
AND FOREIGN EXCHANGE TRANSACTIONS (SWAPS, FRAS, CAPS, FLOORS, COLLARS
AND SWAPTIONS)
Crédit Agricole CIB uses interest-rate and currency swaps mainly for the following
purposes:
1. to maintain individual open positions in order, when possible, to take advantage
of interest rate movements;
2. to hedge interest rate risks affecting one item or a set of homogeneous items;
3. to hedge and manage the group's overall interest rate risk, except for transactions
described in [2] and [4];
4. to carry out specialist management of a trading portfolio consisting of interest-rate
or currency swaps, other forward interest-rate instruments, debt instruments or similar
financial transaction.
Income and expenses related to transactions mentioned in the above section are
recognised
in the income statement as follows:
1. on a prorata basis, and reserves are booked for unrealised losses;
2. symmetrically to the recognition of income and expenses on the hedged item or
set
of items;
3. on a prorata basis, and unrealised gains and losses are not recognised;
4. at market value, adjusted through a MTM adjustment to take into account counterparty
risks and future administrative expenses related to these contracts.
Market value is determined by discounting future cash flows using the zero coupon
method.
As a rule, instruments cannot be reclassified between categories, except for transfers
from category [2] to category [1] or [4] in the event of an interrupted hedge. Transfers
are recognised at the net book value of the instrument, which is then subject to the
rules of the portfolio to which it is transferred.
Up-front and termination fees regarding interest rate or foreign exchange contracts
are spread over the remaining maturity of the transaction or hedged item, except in
the case of marked-to-market contracts, for which they are taken directly to the income
statement.
COUNTERPARTY RISK
ON DERIVATIVE INSTRUMENTS
In accordance with ANC Regulation 2014-07 of 26 November 2014, Crédit Agricole
CIB
makes a Credit Valuation Adjustment (CVA) to the market value of its derivative assets
to reflect counterparty risk. For this reason, Credit Valuation Adjustments are only
made to derivatives recognised as isolated open positions and as part of a trading
portfolio (derivatives classified in categories "a" and "d" Article 2522-1 of the
aforementioned regulation). The CVA makes it possible to calculate counterparty losses
expected by Crédit Agricole CIB.
The CVA is calculated on the basis of an estimate of expected losses based on the
probability of default and loss given default. The methodology used maximises the
use of observable market inputs. It is based:
| ― |
primarily on market data such as registered and listed CDS (or
Single Name CDS) or
index-based CDS;
|
| ― |
in the absence of registered CDS on the counterparty, an approximation
based on a
basket of Single Name CDS of counterparties with the same rating operating in the
same sector and located in the same area.
|
In certain circumstances, historical default data may also be used.
VALUE ADJUSTMENT
RELATED TO DERIVATIVES' FUNDING
In 2014, Crédit Agricole CIB has completed its financial instruments' valuation
measurement,
taking into account good market practises: The value of non-collateralised or partially
collateralised derivative instruments incorporates a Funding Valuation Adjustment
(FVA) that represents costs and benefits related to the financing of these instruments.
This adjustment is measured based on positive or negative future exposure of transactions
for which a cost of financing is applied.
OTHER INTEREST-RATE
OR EQUITY TRANSACTIONS
Crédit Agricole CIB uses various instruments such as interest rate futures and
equity
derivatives for trading or specific hedging purposes.
Contracts concluded for trading purposes are stated at market value, and the corresponding
gains or losses are taken to the income statement.
Gains or losses, realised or unrealised, resulting from the mark-to-market valuation
of specific hedging contracts are spread over the maturity life of the hedged instrument.
CREDIT DERIVATIVES
Crédit Agricole CIB uses credit derivatives mainly for trading purposes, in form
of
Credit Default Swaps (CDS). CDS concluded for trading purposes are stated at market
value, and the corresponding gains or losses are taken to the income statement.
1.9 Foreign currency
transactions
Foreign currency-denominated assets and liabilities are translated at year-end
exchange
rates. The resulting gains and losses, together with gains and losses arising from
exchange rate differences on transactions during the period, are taken to the income
statement.
Monetary receivables and payables, along with forward foreign exchange contracts
that
appear as foreign-currency off-balance sheet commitments, are translated at the market
rate in force at the balance-sheet date or at the market rate on the nearest previous
date.
Capital funds allocated to branches, fixed assets in offices abroad and long term
investment securities and equity investments bought in foreign currencies against
euros are translated into euros at the transaction date. A provision may be booked
if there is a permanent deterioration in the exchange rate affecting Crédit Agricole
CIB's foreign equity interests.
At each reporting date, forward foreign exchange transactions are measured at the
relevant forward exchange rate. Recognised gains or losses are taken to the income
statement under "Gains or losses on trading book - Gains (losses) on foreign currency
transactions and similar financial instruments".
Pursuant to the implementation of Part 7 "Recognition of Foreign Currency Transactions"
of Book II "Special Transactions" of ANC Regulation 2014-07 of 26 November 2014, Crédit
Agricole CIB has instituted multi-currency accounting to enable it to monitor its
currency position and to measure its exposure to foreign exchange risk. Crédit Agricole
CIB Paris' aggregate operating exposure to foreign currency was €1.45 billion at 31
December 2018, compared to €1.64 billion at 31 December 2017.
SPOT AND FORWARD
FOREIGN EXCHANGE CONTRACTS
At each period end, spot foreign exchange contracts are valued at the spot exchange
rate of the currency concerned. Forward foreign exchange transactions categorised
as trading transactions are recognised at market value using the forward rate applicable
to the remaining period of the contract. Recorded net gains or losses are entered
in the income statement under "Net gain/ (loss) from trading portfolios foreign exchange
and similar financial instruments". Net gains and losses on forward foreign exchange
transactions that are categorised as spot exchange transactions in connection with
loans and borrowings, are recognised on a prorate basis over the period of the contracts.
CURRENCY FUTURES
AND OPTIONS
Currency futures and options are used for trading purposes as well as to hedge
specific
transactions. Contracts concluded for trading purposes are stated at market value,
and the corresponding gains or losses are taken to the income statement.
Gains or losses, realised or unrealised, resulting from the mark-to-market valuation
of specific hedging contracts are recognised symmetrically to the hedged transaction.
1.10 Consolidation
of foreign branches
Branches keep separate accounts that comply with the accounting rules in force
in
the countries in which they are based.
At each reporting date, the branches' balance sheets and income statements are
adjusted
according to French accounting rules, converted into euros and integrated with the
accounts of their head office after the elimination of intra-group transactions.
The rules for conversion into euros are as follows:
| ― |
balance sheet items are translated at the closing rate;
|
| ― |
income and expenses paid and received are recorded at the exchange
rate on the transaction
date, whereas accrued income and expenses are converted at the closing rate.
|
Gains or losses resulting from this translation are recorded on the balance sheet
under "Accruals, prepayments and sundry assets" or "Accruals, deferred income and
sundry liabilities".
1.11 Off-balance
sheet commitments
Off-balance sheet items mainly reflect the unused portion of financing commitments
and guarantee commitments given and received.
A charge is booked to provisions for commitments given if there is a probability
that
calling in the commitment will result in a loss for Crédit Agricole CIB.
Reported off-balance sheet items do not mention commitments on forward financial
instruments
or foreign exchange transactions. Similarly, they do not include commitments received
concerning treasury bonds, similar securities and other securities pledged as collateral.
However, details of these items are provided in Note 18 (Outstanding foreign exchange
transactions) and Note 19 (Transactions in financial futures).
1.12 Employee
profit-sharing and incentive plans
Employee profit-sharing is recognised in the income statement in the financial
year
in which the employees' rights are earned, under "Employee expenses".
1.13 Post-employment
benefits
RETIREMENT EARLY
RETIREMENT BENEFITS-DEFINED BENEFIT PLANS
Since 1 January 2013, Crédit Agricole CIB has applied ANC recommendation 2013-02
of
7 November 2013 relating to the measurement and recognition of retirement and similar
benefit obligations, such recommendation having then been repealed and incorporated
in section 4 of chapter II of part III of ANC Regulation 2014-03 of 5 June 2014.
In accordance with this regulation, Crédit Agricole CIB sets aside provisions to
cover
its retirement and similar benefit obligations falling within the category of defined-benefit
plans.
These obligations are stated on the basis of actuarial, financial and demographic
assumptions, and in accordance with the projected unit credit method. This method
consists in booking a charge for each period of service, for an amount corresponding
to employee's vested benefits for the period. This charge is calculated based on the
discounted future benefit.
Crédit Agricole CIB elected to immediately recognise the actuarial gains and losses
in profit or loss, and accordingly the amount of the provision is equal to:
| ― |
the present value of the obligation to provide the defined benefits
at the reporting
date, calculated in accordance with the actuarial method advised by the regulation;
|
| ― |
less, where applicable, the fair value of plan assets. These
may be represented by
an eligible insurance policy. In the event that the obligation is fully covered by
such a policy, the fair value of the policy is deemed to be the value of the corresponding
obligation, i.e. the amount of the corresponding actuarial liability.
|
RETIREMENT PLANS-
DEFINED-CONTRIBUTION PLANS
There are various mandatory pension plans to which employers contribute. The funds
are managed by independent organisations and the contributing companies have no legal
or implied obligation to pay additional contributions if the funds do not have sufficient
assets to provide all the benefits corresponding to the services rendered by staff
during the current and previous years.
As a consequence, Crédit Agricole CIB has no liability in this respect other that
the contributions to be paid for the year ended. The amount of contributions under
the terms of these pension schemes is shown under "Employee expenses".
1.14 Extraordinary
income and expenses
These comprise income and expenses that are extraordinary in nature and relate
to
transactions that do not form part of Crédit Agricole CIB's ordinary activities.
1.15 Income tax
charge
The tax charge or the tax income appearing in the income statement is the income
tax
payable, including the impact of the 3.3% additional social contribution on profits,
as well as the tax provisions of the reporting period.
Crédit Agricole CIB is 100%-owned, directly or indirectly, by Crédit Agricole Group
and is an integral part of the Crédit Agricole Group tax consolidation group. Crédit
Agricole CIB is head of the Crédit Agricole sub-group, formed with its consolidated
subsidiaries. Crédit Agricole CIB signed a tax consolidation agreement with Crédit
Agricole S.A. Under the terms of the agreement, the deficits generated by all subsidiaries
of the Crédit Agricole CIB sub-Group will be compensated by Crédit Agricole S.A.
When tax credits on income from securities portfolios and amounts receivable are
effectively
used to pay income tax due for the year, they are recognised under the same heading
as the income with which they are associated. The corresponding tax charge is kept
under the heading "Income tax charge" in the income statement. Given that the legislative
intent when introducing the tax credit for competitiveness and employment (Credit
d'Impôt pour la Compétitivité et l'Emploi - CICE) was to reduce employee expenses,
Crédit Agricole CIB has chosen to recognise the CICE (Article 244 quater C of the
French General Tax Code) as a reduction in employee expenses rather than a tax reduction.
NOTE 2: LOANS
AND RECEIVABLES DUE FROM CREDIT INSTITUTIONS - ANALYSIS BY RESIDUAL
MATURITY
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months ≤ 1 year |
>1 year ≤ 5 years |
>5 years |
Total principal |
Accrued interest |
| Loans and receivables: |
|
|
|
|
|
|
| Demand |
2,664 |
|
|
|
2,664 |
1 |
| Time |
7,378 |
3,866 |
3,112 |
2,913 |
17,269 |
93 |
| Pledged securities |
|
|
|
|
|
|
| Securities bought under repurchases agreements |
41,691 |
8,373 |
702 |
|
50,766 |
140 |
| Subordinated debt |
275 |
|
|
206 |
481 |
1 |
| Total |
52,008 |
12,239 |
3,814 |
3,119 |
71,180 |
235 |
| Impairment |
|
|
|
|
(328) |
(62) |
| Net carrying amount (1) |
|
|
|
|
70,852 |
173 |
|
|
31.12.2018 |
31.12.2017 |
| € million |
Total |
Total |
| Loans and receivables: |
|
|
| Demand |
2,665 |
4,886 |
| Time |
17,362 |
22,833 |
| Pledged securities |
|
|
| Securities bought under repurchases agreements |
50,906 |
42,258 |
| Subordinated debt |
482 |
591 |
| Total |
71,415 |
70,568 |
| Impairment |
(390) |
(382) |
| Net carrying amount (1) |
71,025 |
70,186 |
(1)
Among related parties, the main counterparty is Crédit Agricole S.A. (€6,532 million
at 31.12.2018 and €12,970 million at 31.12.2017).
NOTE 3: LOANS
AND RECEIVABLES DUE FROM CUSTOMERS
3.1 Analysis by
residual maturity
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months ≤ 1 year |
>1 year ≤ 5 years |
>5 years |
Total principal |
Accrued interest |
| Trade receivables |
2,022 |
1,670 |
2,025 |
62 |
5,779 |
4 |
| Other customer loans (1) |
16,411 |
11,018 |
46,765 |
21,972 |
96,166 |
516 |
| Securities bought under repurchases agreements |
47,785 |
8,857 |
3,552 |
|
60,194 |
87 |
| Current accounts |
828 |
|
|
|
828 |
3 |
| in debit |
|
|
|
|
(1,371) |
(220) |
| Impairment |
|
|
|
|
161,596 |
390 |
| Net carrying amount |
|
|
|
|
|
|
|
|
31.12.2018 |
31.12.2017 |
| € million |
Total |
Total |
| Trade receivables |
5,783 |
4,161 |
| Other customer loans (1) |
96,682 |
87,466 |
| Securities bought under repurchases agreements |
60,281 |
54,316 |
| Current accounts |
831 |
1,163 |
| in debit |
(1,591) |
(1,815) |
| Impairment |
161,986 |
145,291 |
| Net carrying amount |
|
|
(1)
Subordinated loans granted to customers amounted to €665 million at 31.12.2018 compared
to €643 million at 31.12.2017.
3.2 Analysis by
geographic area
| € million |
31.12.2018 |
31.12.2017 |
| France (including overseas departements and territories) |
37,474 |
31,959 |
| Other EU countries |
37,654 |
36,940 |
| Rest of Europe |
5,819 |
4,455 |
| North America |
23,105 |
22,463 |
| Central and South America |
18,530 |
14,739 |
| Africa and Middle-East |
7,553 |
6,193 |
| Asia and Pacific (excl. Japan) |
14,284 |
12,823 |
| Japan |
18,548 |
16,671 |
| Supranational organisations |
|
378 |
| Total principal |
162,967 |
146,621 |
| Accrued interest |
610 |
485 |
| Impairment |
(1,591) |
(1,815) |
| Net carrying amount |
161,986 |
145,291 |
3.3 Doubtful loans,
bad debts and impairment by geographic area
|
|
31.12.2018 |
| € million |
Gross outstandings |
O/W doubtful loans and receivables |
O/W bad debts |
Impairment of doubtful loans and
receivables |
Impairments of bad debts |
Coverage %
|
| France (including overseas departements and territories) |
37,474 |
20 |
233 |
(8) |
(225) |
92.09% |
| Other EU countries |
37,654 |
509 |
306 |
(228) |
(103) |
40.61% |
| Rest of Europe |
5,819 |
104 |
6 |
(46) |
(6) |
47.27% |
| North America |
23,105 |
114 |
4 |
(25) |
(4) |
24.58% |
| Central and South America |
18,530 |
264 |
281 |
(126) |
(265) |
71.74% |
| Africa and Middle-East |
7,553 |
286 |
183 |
(87) |
(180) |
56.93% |
| Asia and Pacific (excl. Japan) |
14,284 |
238 |
43 |
(36) |
(32) |
24.20% |
| Japan |
18,548 |
|
|
|
|
|
| Supranational organisations |
|
|
|
|
|
|
| Accrued interest |
610 |
42 |
178 |
(42) |
(178) |
100.00% |
| Net carrying amount |
163,577 |
1,577 |
1,234 |
(598) |
(993) |
56.60% |
|
|
31.12.2017 |
| € million |
Gross outstandings |
O/W doubtful loans and receivables |
O/W bad debts |
Impairment of doubtful loans and
receivables |
Impairments of bad debts |
Coverage %
|
| France (including overseas departements and territories) |
31,959 |
179 |
229 |
(62) |
(188) |
61.27% |
| Other EU countries |
36,940 |
492 |
553 |
(257) |
(143) |
38.28% |
| Rest of Europe |
4,455 |
90 |
131 |
(49) |
(107) |
70.59% |
| North America |
22,463 |
54 |
68 |
(20) |
(4) |
19.67% |
| Central and South America |
14,739 |
228 |
365 |
(86) |
(308) |
66.44% |
| Africa and Middle-East |
6,193 |
94 |
334 |
(20) |
(231) |
58.64% |
| Asia and Pacific (excl. Japan) |
12,823 |
92 |
315 |
(11) |
(121) |
32.43% |
| Japan |
16,671 |
19 |
|
|
|
|
| Supranational organisations |
378 |
|
|
|
|
|
| Accrued interest |
485 |
67 |
141 |
(67) |
(141) |
100.00% |
| Net carrying amount |
147,106 |
1,315 |
2,136 |
(572) |
(1,243) |
52.59% |
3.4 Analysis by
customer type
|
|
31.12.2018 |
| € million |
Gross outstandings |
O/W doubtful loans and receivables |
O/W bad debts |
Impairment of doubtful loans and
receivables |
Impairments of bad debts |
| Individual customers |
528 |
|
|
|
|
| Farmers |
254 |
12 |
|
(10) |
|
| Other small businesses |
|
|
|
|
|
| Financial institutions |
33,726 |
3 |
320 |
|
(124) |
| Corporates |
121,161 |
1,458 |
722 |
(543) |
(677) |
| Local authorities |
7,298 |
62 |
14 |
(3) |
(14) |
| Other customers |
|
|
|
|
|
| Accrued interest |
610 |
42 |
178 |
(42) |
(178) |
| Carrying amount |
163,577 |
1,577 |
1,234 |
(598) |
(993) |
|
|
31.12.2017 |
| € million |
Gross outstandings |
O/W doubtful loans and receivables |
O/W bad debts |
Impairment of doubtful loans and
receivables |
Impairments of bad debts |
| Individual customers |
790 |
|
|
|
|
| Farmers |
283 |
|
|
|
|
| Other small businesses |
|
|
|
|
|
| Financial institutions |
29,982 |
4 |
316 |
(1) |
(116) |
| Corporates |
110,894 |
1,172 |
1,668 |
(500) |
(975) |
| Local authorities |
4,672 |
72 |
11 |
(4) |
(11) |
| Other customers |
|
|
|
|
|
| Accrued interest |
485 |
67 |
141 |
(67) |
(141) |
| Carrying amount |
147,106 |
1,315 |
2,136 |
(572) |
(1,243) |
NOTE 4: TRADING,
SHORT-TERM INVESTMENT, LONG-TERM INVESTMENT AND MEDIUM-TERM PORTFOLIO
SECURITIES
|
|
31.12.2018 |
31.12.2017 |
| € million |
Trading securities |
Short-term investment securities |
Medium-term portfolio securities |
Long-term investment securities |
Total |
Total |
| Treasury Bills and similar securities |
17,970 |
1,768 |
|
6,010 |
25,748 |
23,133 |
| O/W residual net premium |
|
(20) |
|
(0) |
(20) |
(55) |
| O/W residual net discount |
|
71 |
|
67 |
138 |
161 |
| Accrued interest |
|
13 |
|
11 |
24 |
35 |
| Impairment |
|
(0) |
|
|
(0) |
(1) |
| Net carrying amount |
17,970 |
1,781 |
|
6,021 |
25,772 |
23,167 |
| Bonds and other fixed income securities (1) |
|
|
|
|
|
|
| Issued by public bodies |
449 |
550 |
|
1,310 |
2,310 |
2,405 |
| Other issuers |
6,692 |
7,515 |
|
9,205 |
23,412 |
20,910 |
| O/W residual net premium |
|
(40) |
|
(16) |
(56) |
(23) |
| O/W residual net discount |
|
51 |
|
44 |
95 |
128 |
| Accrued interest |
|
52 |
|
40 |
92 |
83 |
| Impairment |
|
(29) |
|
(212) |
(241) |
(279) |
| Net carrying amount |
7,141 |
8,088 |
|
10,343 |
25,572 |
23,119 |
| Equities and other equity variable-income securities |
4,354 |
144 |
53 |
|
4,551 |
7,861 |
| Accrued interest |
|
|
|
|
|
|
| Impairment |
|
(38) |
(8) |
|
(46) |
(64) |
| Net carrying amount |
4,354 |
106 |
45 |
|
4,505 |
7,797 |
| Total |
29,465 |
9,975 |
45 |
16,364 |
55,849 |
54,083 |
| Estimated value |
29,465 |
10,077 |
53 |
17,483 |
57,078 |
60,510 |
(1)
Subordinated loans in the portfolio amount to €43 million at 31 December 2018 compared
€42 million at 31 December 2017.
BANKING BOOK
Crédit Agricole CIB (S.A.) owns sovereign debts of Spain.
The net positive exposure amounts to €384 million.
4.1 Reclassification
Crédit Agricole CIB carried out reclassifications of securities on 1 October 2008
as permitted by CRC Regulation 2008-17.
At 31 December 2018, the balance sheet value is nil. The changes over the year
are
detailed below.
CONTRIBUTION TO
INCOME OF TRANSFERRED ASSETS SINCE RECLASSIFICATION
The contribution from assets transferred to net income for the financial year since
the date of reclassification comprises all profits, losses,
income and expenses recognised in the income statement and other comprehensive
income
or expenses.
|
|
Pre-tax impact on
2009 earnings since reclassification (Assets reclassified before
2009)
|
|
|
Cumulative impact
at 31.12.2017 |
2018 Impact |
Cumulative impact
at 31.12.2018 |
| € million |
Recognized income and expenses |
If the asset had been kept in its
original category (change in fair value) |
Recognized income and expenses |
If the asset had been kept in its
original category (change in fair value) |
Recognized income and expenses |
If the asset had been kept in its
original category (change in fair value) |
| From trading to investment securities |
(105) |
(106) |
6 |
6 |
(99) |
(100) |
4.2 Breakdown
of listed and unlisted securities between fixed income and variable-income
securities
|
|
31.12.2018 |
| € million |
Bonds and other fixed income securities |
Treasury bills and similar items |
Equities and other variable income
securities |
Total |
| Listed securities |
25,552 |
25,426 |
4,462 |
55,440 |
| Unlisted securities |
169 |
322 |
89 |
580 |
| Accrued interest |
92 |
24 |
|
116 |
| Impairment |
(241) |
|
(46) |
(287) |
| Net carrying amount |
25,572 |
25,772 |
4,505 |
55,849 |
|
|
31.12.2017 |
| € million |
Bonds and other fixed income securities |
Treasury bills and similar items |
Equities and other variable income
securities |
Total |
| Listed securities |
22,816 |
21,631 |
7,719 |
52,166 |
| Unlisted securities |
499 |
1,502 |
142 |
2,143 |
| Accrued interest |
83 |
35 |
|
118 |
| Impairment |
(279) |
(1) |
(64) |
(344) |
| Net carrying amount |
23,119 |
23,167 |
7,797 |
54,083 |
4.3 Treasury bills,
bonds and other fixed-income securities - Analysis by residual
maturity
|
|
31.12.2018 |
| € million |
≤ 3 months |
>3 months ≤ 1 year |
>1 year ≤ 5 years |
>5 years |
Total principal |
Accrued interests |
| Bonds and other fixed income securities |
|
|
|
|
|
|
| Gross amount |
5,485 |
5,810 |
9,753 |
4,673 |
25,721 |
92 |
| Impairment |
|
|
|
|
|
|
| Net carrying amount |
5,485 |
5,810 |
9,753 |
4,673 |
25,721 |
92 |
| Treasury bills and similar items |
|
|
|
|
|
|
| Gross amount |
11,762 |
4,451 |
2,509 |
7,026 |
25,748 |
24 |
| Impairment |
|
|
|
|
|
|
| Net carrying amount |
11,762 |
4,451 |
2,509 |
7,026 |
25,748 |
24 |
|
|
31.12.2018 |
31.12.2017 |
| € million |
Total |
Total |
| Bonds and other fixed income securities |
|
|
| Gross amount |
25,813 |
23,398 |
| Impairment |
(241) |
(279) |
| Net carrying amount |
25,572 |
23,119 |
| Treasury bills and similar items |
|
|
| Gross amount |
25,772 |
23,168 |
| Impairment |
|
(1) |
| Net carrying amount |
25,772 |
23,167 |
4.4 Treasury bills,
bonds and other fixed-income securities - Analysis by geographic
area
| € million |
31.12.2018 |
31.12.2017 |
| France (including overseas departements and territories) |
16,204 |
15,447 |
| Other EU countries |
12,978 |
15,246 |
| Other european countries |
2,930 |
647 |
| North America |
7,230 |
3,755 |
| Central and South America |
601 |
305 |
| Africa and Middle-East |
174 |
97 |
| Asia and Pacific (excl. Japan) |
5,415 |
4,647 |
| Japan |
4,137 |
5,363 |
| Supranational organisations |
1,800 |
941 |
| Total principal |
51,469 |
46,448 |
| Accrued interest |
116 |
118 |
| Impairment |
(241) |
(280) |
| Net carrying amount |
51,344 |
46,286 |
NOTE 5: EQUITY
INVESTMENTS AND SUBSIDIARIES
| Company |
Share capital |
Share capital In million of
original currency units
|
Premiums reserves and retained
earnings before appropriation of earnings In million of original currency units
|
Percentage of share capital owned
In %
|
Carrying amounts of securities
owned € million
|
Loans and receivables outstanding
granted by the Company and not yet paid back In million of original currency units
|
| I - Detailed information on investments whose gross carrying
amount exceeds 1% of
Crédit Agricole cib's share capital
|
|
|
|
|
|
|
| A - Subsidiaries (more than 50% owned by Crédit Agricole
CIB) |
|
|
|
|
|
|
| Banco CA Brasil S.A. |
BRL |
684 |
145 |
75.49 |
322 |
|
| CACIB Algérie s.p.a |
DZD |
10,000 |
236 |
99.99 |
97 |
|
| CA GLOBAL PARTNER Inc |
USD |
723 |
66 |
100.00 |
535 |
|
| CA PRIVATE BANKING |
EUR |
2,650 |
77 |
100.00 |
2,650 |
CHF 1583 |
| CACIB (China) Limited |
RMB |
3,199 |
417 |
100.00 |
348 |
USD 60 |
| CACIB Global Banking |
EUR |
145 |
139 |
100.00 |
262 |
|
| CASA BV |
JPY |
13,429 |
2,884 |
100.00 |
180 |
JPY 1 |
| MERISMA SAS |
EUR |
1,150 |
(48) |
100.00 |
1,107 |
EUR 107 |
| Subtotal (1) |
|
|
|
|
5,501 |
|
| B - Banking affiliates (10 and 50% owned by Crédit Agricole
CIB) |
|
|
|
|
|
|
| BANQUE SAUDI FRANSI |
SAR |
12 |
19 |
14.91 |
354 |
|
| Subtotal (2) |
|
|
|
|
354 |
|
| II - General information relating to other subsidiaries
and affiliates |
|
|
|
|
|
|
| A - Subsidiaries not covered in I. above (3) |
|
|
|
|
412 |
|
| a) French subsidiaries (aggregate) |
|
|
|
|
192 |
|
| b) Foreign subsidiaries (aggregate) |
|
|
|
|
221 |
|
| B - Affiliates not covered in I. above (4) |
|
|
|
|
165 |
|
| a) French affiliates (aggregate) |
|
|
|
|
54 |
|
| b) Foreign affiliates (aggregate) |
|
|
|
|
111 |
|
| Total associates (1) + (2) + (3) + (4) |
|
|
|
|
6,433 |
|
| Company |
Guarantees and other commitments
given by the Company In million of original currency units
|
NBI or revenue (ex VAT) for the
year ended (from audited financial statements of 2016)
In million of original currency units
|
Net income for the year ended In
million of original currency units
|
Dividends received by the Company
during the financial year € million
|
| I - Detailed information on investments whose gross carrying
amount exceeds 1% of
Crédit Agricole cib's share capital
|
|
|
|
|
| A - Subsidiaries (more than 50% owned by Crédit Agricole
CIB) |
|
|
|
|
| Banco CA Brasil S.A. |
USD,28 |
418 |
13 |
4 |
| CACIB Algérie s.p.a |
|
692 |
70 |
1 |
| CA GLOBAL PARTNER Inc |
|
13 |
14 |
|
| CA PRIVATE BANKING |
|
17 |
155 |
133 |
| CACIB (China) Limited |
CNY, 7073 EUR,3 USD |
371 |
26 |
|
| CACIB Global Banking |
|
|
(12) |
|
| CASA BV |
|
13,817 |
6,072 |
|
| MERISMA SAS |
|
|
|
|
| Subtotal (1) |
|
|
|
|
| B - Banking affiliates (10 and 50% owned by Crédit Agricole
CIB) |
|
|
|
|
| BANQUE SAUDI FRANSI |
|
7 |
4 |
55 |
| Subtotal (2) |
|
|
|
|
| II - General information relating to other subsidiaries
and affiliates |
|
|
|
|
| A - Subsidiaries not covered in I. above (3) |
|
|
|
|
| a) French subsidiaries (aggregate) |
|
|
|
|
| b) Foreign subsidiaries (aggregate) |
|
|
|
|
| B - Affiliates not covered in I. above (4) |
|
|
|
|
| a) French affiliates (aggregate) |
|
|
|
|
| b) Foreign affiliates (aggregate) |
|
|
|
|
| Total associates (1) + (2) + (3) + (4) |
|
|
|
|
5.1 Estimated
value of equity investments
|
|
31.12.2018 |
31.12.2017 |
| € million |
Net carrying amount |
Estimated value |
Net carrying amount |
Estimated value |
| Investments in subsidiaries and affiliates |
|
|
|
|
| Unlisted securities |
7,408 |
7,773 |
7,330 |
7,519 |
| Listed securities |
|
|
|
|
| Advances available for consolidation |
|
|
|
|
| Accrued interest |
|
|
|
|
| Impairment |
(1,566) |
|
(1,601) |
|
| Net carrying amount |
5,842 |
7,773 |
5,729 |
7,519 |
| Equity investments and other long-term investment securities |
|
|
|
|
| Equity investments |
|
|
|
|
| Unlisted securities |
314 |
180 |
298 |
163 |
| Listed securities |
429 |
1,388 |
429 |
1,236 |
| Advances available for consolidation |
|
|
|
|
| Accrued interest |
|
|
|
|
| Impairment |
(160) |
|
(165) |
|
| Sub-total of equity investments |
583 |
1,568 |
562 |
1,399 |
| Other long term equity investments |
|
|
|
|
| Unlisted securities |
13 |
11 |
13 |
15 |
| Listed securities |
|
|
|
|
| Advances available for consolidation |
|
|
|
|
| Accrued interest |
|
|
|
|
| Impairment |
(5) |
|
(5) |
|
| Sub-total of long term equity investments |
8 |
11 |
8 |
15 |
| Net carrying amount |
591 |
1,579 |
570 |
1,414 |
| Total of equity investments |
6,433 |
9,352 |
6,299 |
8,933 |
As regards listed securities, the market value shown in the above table is the
quoted
price of the shares on their trading market at 31 December. It may not be representative
of the realisable value of the securities.
|
|
31.12.2018 |
31.12.2017 |
| € million |
Net carrying amount |
Net carrying amount |
| Total gross value |
|
|
| Unlisted securities |
7,735 |
7,641 |
| Listed securities |
429 |
429 |
| Total |
8,164 |
8,070 |
NOTE 6: MOVEMENTS
IN FIXED ASSETS
| € million |
31.12.2017 |
Change in scope |
Merger |
Increase (acquisitions) |
Decrease (disposals, maturity) |
Translation difference |
| Equity investments |
|
|
|
|
|
|
| Gross amount |
727 |
|
|
29 |
(20) |
3 |
| Impairment |
(165) |
|
|
|
5 |
|
| Other long-term equity investment |
|
|
|
|
|
|
| Gross amount |
13 |
|
|
|
|
|
| Impairment |
(5) |
|
|
|
|
|
| Subtotal |
570 |
|
|
29 |
(15) |
3 |
| Investments in subsidiaries and affiliates |
|
|
|
|
|
|
| Gross amount |
7,330 |
|
|
150 |
(79) |
0 |
| Impairment |
(1,601) |
|
|
(23) |
52 |
2 |
| Advances available for consolidation |
|
|
|
|
|
|
| Gross amount |
|
|
|
|
|
|
| Impairment |
|
|
|
|
|
|
| Accrued interest |
|
|
|
4 |
|
|
| Net carrying amount |
6,299 |
|
|
159 |
(40) |
5 |
| Intangible assets |
139 |
|
|
114 |
(63) |
2 |
| Gross amount |
624 |
|
|
154 |
(63) |
3 |
| Depreciation |
(485) |
|
|
(40) |
|
(1) |
| Property, plant and equipment |
89 |
|
|
15 |
(1) |
|
| Gross amount |
640 |
|
|
39 |
(3) |
7 |
| Depreciation |
(551) |
|
|
(24) |
2 |
(7) |
| Valeur nette au bilan |
228 |
|
|
129 |
(64) |
2 |
| € million |
Other movements |
31.12.2018 |
| Equity investments |
|
|
| Gross amount |
4 |
747 |
| Impairment |
|
(160) |
| Other long-term equity investment |
|
|
| Gross amount |
|
13 |
| Impairment |
|
(5) |
| Subtotal |
4 |
591 |
| Investments in subsidiaries and affiliates |
|
|
| Gross amount |
7 |
7,408 |
| Impairment |
0 |
(1,570) |
| Advances available for consolidation |
|
|
| Gross amount |
|
|
| Impairment |
|
|
| Accrued interest |
|
4 |
| Net carrying amount |
14 |
6,437 |
| Intangible assets |
|
192 |
| Gross amount |
|
718 |
| Depreciation |
|
(526) |
| Property, plant and equipment |
(1) |
102 |
| Gross amount |
|
683 |
| Depreciation |
(1) |
(581) |
| Valeur nette au bilan |
(1) |
294 |
NOTE 7: ACCRUALS,
PREPAYMENTS AND SUNDRY ASSETS
| € million |
31.12.2018 |
31.12.2017 |
| Other asset (1) |
43,177 |
49,103 |
| Financial options bought |
18,186 |
21,981 |
| Collective management of Livret de Développement Durable
(LDD) saving account securities |
|
|
| Miscellaneous debtors (2) |
23,720 |
26,221 |
| Settlement accounts |
1,271 |
901 |
| Due from shareholders - Unpaid capital |
|
|
| Accruals and prepayments |
100,442 |
107,447 |
| Items in course of transmission |
(37) |
165 |
| Adjustement accounts |
99,984 |
106,650 |
| Accrued income |
160 |
69 |
| Prepaid expenses |
59 |
42 |
| Unrealised losses and deferred losses on financial instruments |
21 |
13 |
| Bond issue and redemption premiums |
|
|
| Other accrual prepayments and sundry assets |
255 |
508 |
| Net carrying amount |
143,619 |
156,550 |
(1)
The amounts shown are net of impairment and include accrued interest.
(2)
Including €104 million for the contribution to the Guarantee and Resolution Fund paid
in the form of a security deposit.
This deposit is usable by the Resolution and Guarantee Fund, at any time and without
conditions, to finance an intervention.
NOTE 8: IMPAIRMENT
LOSSES DEDUCTED FROM ASSETS
| € million |
31.12.2017 |
Depreciation charges |
Reversals and utilisations |
Translation differences |
Other movements |
31.12.2018 |
| Cash, money-market and interbank items |
382 |
1 |
(7) |
14 |
|
390 |
| Loans and receivables due from customers |
1,815 |
468 |
(706) |
38 |
(24) |
1,591 |
| Securities transactions |
344 |
3 |
(70) |
6 |
4 |
287 |
| Participating interests and other long-term investments |
1,771 |
24 |
(59) |
(2) |
(3) |
1,731 |
| Other |
40 |
14 |
(41) |
|
(1) |
12 |
| Total |
4,352 |
510 |
(883) |
56 |
(24) |
4,011 |
NOTE 9: DUE TO
CREDIT INSTITUTIONS - ANALYSIS BY RESIDUAL MATURITY
|
|
31.12.2018 |
| € million |
< 3 months |
>3 months <1 year |
>1 year <5 years |
>5 years |
Total principal |
Accrued interest |
| Accounts and overdrafts |
|
|
|
|
|
|
| Demand |
7,525 |
|
|
|
7,525 |
2 |
| Time |
19,772 |
8,120 |
12,230 |
4,561 |
44,683 |
152 |
| Pledged securities |
|
|
|
|
|
|
| Securities sold under repurchase agreements |
19,808 |
477 |
1,102 |
|
21,387 |
65 |
| Carrying amount (1) |
|
|
|
|
|
|
|
|
31.12.2018 |
31.12.2017 |
| € million |
Total |
Total |
| Accounts and overdrafts |
|
|
| Demand |
7,527 |
4,865 |
| Time |
44,835 |
43,859 |
| Pledged securities |
|
|
| Securities sold under repurchase agreements |
21,452 |
24,481 |
| Carrying amount (1) |
73,814 |
73,205 |
(1)
Including €18,687 million at 31.12.2018 compared to €21,439 million at 31.12.2017
with Crédit Agricole S.A..
NOTE 10: DUE TO
CUSTOMERS
10.1 Analysis
by residual maturity
|
|
31.12.2018 |
| € million |
< 3 months |
>3 months < 1 year |
>1 year < 5 years |
>5 years |
Total principal |
Accrued interest |
| Current accounts in credit |
30,082 |
|
|
|
30,082 |
16 |
| Other accounts due to customers |
64,126 |
5,288 |
5,515 |
2,811 |
77,740 |
129 |
| Securities sold under repurchase agreements |
59,575 |
99 |
56 |
3 |
59,733 |
64 |
| Carrying amount |
|
|
|
|
|
|
|
|
31.12.2018 |
31.12.2017 |
| € million |
Total |
Total |
| Current accounts in credit |
30,098 |
24,708 |
| Other accounts due to customers |
77,869 |
65,591 |
| Securities sold under repurchase agreements |
59,797 |
48,471 |
| Carrying amount |
167,764 |
138,770 |
10.2 Analysis
by geographic area
| € million |
31.12.2018 |
31.12.2017 |
| France (including overseas departements and territories) |
32,748 |
30,879 |
| Other EU countries |
40,479 |
35,218 |
| Rest of Europe |
2,780 |
3,111 |
| North America |
42,744 |
28,203 |
| Central and South America |
18,845 |
19,415 |
| Africa and Middle-East |
3,529 |
1,919 |
| Asia and Pacific (excl. Japan) |
16,547 |
9,880 |
| Japan |
9,533 |
9,046 |
| Supranational organisations |
350 |
238 |
| Total principal |
167,555 |
137,909 |
| Accrued interest |
209 |
861 |
| Carrying amount |
167,764 |
138,770 |
10.3 Analysis
by customer type
| € million |
31.12.2018 |
31.12.2017 |
| Individuals customers |
282 |
363 |
| Farmers |
22 |
|
| Other small businesses |
206 |
|
| Financial institutions |
44,573 |
37,688 |
| Corporates |
104,236 |
82,122 |
| Local authorities |
17,712 |
17,538 |
| Other customers |
524 |
198 |
| Total principal |
167,555 |
137,909 |
| Accrued interest |
209 |
861 |
| Carrying amount |
167,764 |
138,770 |
NOTE 11: DEBT
SECURITIES
11.1 Analysis
by residual maturity
|
|
31.12.2018 |
| € million |
< 3 months |
>3 months < 1 year |
>1 year < 5 years |
>5 years |
Total principal |
Accrued interest |
| Interest-bearing notes |
192 |
|
|
|
192 |
|
| Money-market instruments |
|
|
|
|
|
|
| Negotiable debt securities: |
15,224 |
8,258 |
8,172 |
8,795 |
40,449 |
37 |
| Issued in France |
781 |
1,811 |
7,259 |
8,795 |
18,646 |
|
| Issued abroad |
14,443 |
6,447 |
913 |
|
21,803 |
37 |
| Bonds |
|
|
1,997 |
605 |
2,602 |
2 |
| Other debt instruments |
|
|
|
|
|
|
| Carrying amount |
|
|
|
|
43,243 |
39 |
|
|
31.12.2017 |
| € million |
Total |
Total |
| Interest-bearing notes |
192 |
85 |
| Money-market instruments |
|
|
| Negotiable debt securities: |
40,486 |
39,129 |
| Issued in France |
18,646 |
18,293 |
| Issued abroad |
21,840 |
20,836 |
| Bonds |
2,604 |
1,250 |
| Other debt instruments |
|
|
| Carrying amount |
43,282 |
40,464 |
11.2 Bonds
|
|
Outstanding schedule
at 31.12.2018 |
Outstanding at |
Outstanding at |
| € million |
< 1 year |
>1 year < 5 years |
>5 years |
31.12.2018 |
31.12.2017 |
| Euro |
|
1,110 |
600 |
1,710 |
1,250 |
| Fixed rate |
|
|
|
|
|
| Variable rate |
|
1,110 |
600 |
1,710 |
1,250 |
| Other currencies |
|
887 |
5 |
892 |
|
| Fixed rate |
|
3 |
4 |
7 |
|
| Variable rate |
|
884 |
1 |
885 |
|
| Total principal |
|
1,997 |
605 |
2,602 |
1,250 |
| Fixed rate |
|
3 |
4 |
7 |
|
| Variable rate |
|
1,994 |
601 |
2,595 |
1,250 |
| Related payables |
|
2 |
|
2 |
|
| Accrued interest |
|
|
|
2,604 |
1,250 |
NOTE 12: ACCRUALS,
DEFERRED INCOME AND SUNDRY LIABILITIES
| € million |
31.12.2018 |
31.12.2017 |
| Other liabilities (1) |
68,953 |
69,758 |
| Counterparty transactions (trading securities) |
22,543 |
21,592 |
| Liabilities relating to stock lending transactions |
10,056 |
8,303 |
| Optional instruments sold |
18,371 |
22,974 |
| Miscellaneous creditors |
16,756 |
15,956 |
| Settlement accounts |
1,202 |
933 |
| Payments in process |
25 |
|
| Other |
|
|
| Accruals and deferred income |
101,205 |
113,306 |
| Items in course of transmission |
302 |
839 |
| Adjustment accounts |
98,941 |
110,338 |
| Unearned income |
434 |
536 |
| Accrued expenses |
1,227 |
1,495 |
| Unrealised gains and deferred gains on financial instrument |
20 |
10 |
| Other accruals prepayments and sundry assets |
281 |
88 |
| Carrying amount |
170,158 |
183,064 |
(1)
Amounts include accrued interests.
NOTE 13: PROVISIONS
| € million |
31.12.2017 |
Changes in scope |
Depreciation charges |
Reversals, amount used |
Translation differences |
Other movements |
| Country risks |
672 |
|
20 |
(97) |
15 |
(210) |
| Financing commitment execution risks |
197 |
|
90 |
(195) |
1 |
|
| Employee retirement and similar benefits |
243 |
|
29 |
(57) |
|
15 |
| Financial instruments |
1 |
|
|
(1) |
|
|
| Litigations and others (1) |
645 |
|
133 |
(50) |
6 |
|
| Other provisions (2) |
1,444 |
|
221 |
(134) |
17 |
176 |
| Carrying amount |
3,202 |
|
493 |
(534) |
39 |
(19) |
| € million |
31.12.2018 |
| Country risks |
400 |
| Financing commitment execution risks |
93 |
| Employee retirement and similar benefits |
230 |
| Financial instruments |
|
| Litigations and others (1) |
734 |
| Other provisions (2) |
1,724 |
| Carrying amount |
3,181 |
(1)
Of which:
- tax disputes: €380 million- customer litigation: €343 million- social litigation:
€9 million
(2)
including, for Crédit Agricole CIB Paris:- other risks and expenses: €1,221 million
13.1 Tax Audits
CRÉDIT AGRICOLE
CIB PARIS TAX AUDIT
After an audit of accounts covering years 2013, 2014 and 2015, adjustments were
carried
out on Crédit Agricole CIB as part of a proposed adjustment received at the end of
December 2018. Crédit Agricole CIB is challenging the proposed adjustments. A provision
has been recognised to cover the estimated risk.
CRÉDIT AGRICOLE
CIB MILAN AND LONDON TAX AUDIT REGARDING TRANSFER PRICING
Following tax audits, Crédit Agricole CIB Milan received proposals for adjustments
for financial years 2005 to 2013 from the Italian tax authorities in the area of transfer
prices. Crédit Agricole CIB challenged the proposed adjustments. At the same time,
the case has been referred to the competent French-Italian authorities for all years.
A provision was recognised to cover the estimated risk.
13.2 Inquiries
and requests for information from regulators
OFFICE OF FOREIGN
ASSETS CONTROL (OFAC)
In October 2015, Crédit Agricole S.A. and its subsidiary Crédit Agricole Corporate
and Investment Bank (Crédit Agricole CIB) reached agreements with the US and New York
authorities that had been conducting investigations regarding US dollar transactions
with countries subject to US economic sanctions. The events covered by this agreement
took place between 2003 and 2008. Crédit Agricole CIB and Crédit Agricole S.A., which
cooperated with the US and New York authorities in connection with their investigations,
have agreed to pay a total penalty amount of $787.3 million (i.e. €692.7 million).
The payment of this penalty has been allocated to the pre-existing reserve that had
already been taken and, therefore, has not affected the accounts for the second half
of 2015.
The agreements with the Board of Governors of the Federal Reserve System (Fed)
and
the New-York State Department of Financial Services (NYDFS) are with Crédit Agricole
S.A. and Crédit Agricole CIB. The agreement with the Office of Foreign Assets Control
(OFAC) of the US Department of the Treasury is with Crédit Agricole CIB. Crédit Agricole
CIB also entered into separate deferred prosecution agreements (DPAs) with the United
States Attorney's Office for the District of Columbia (USAO) and the District Attorney
of the County of New York (DANY), the terms of which are three years. On October 19,
2018 the two deferred prosecution agreements with USAO and DANY ended at the end of
the three year period, Crédit Agricole CIB having complied with all its obligations
under the DPAs.
Crédit Agricole continues to strengthen its internal procedures and its compliance
programs regarding laws on international sanctions and will continue to cooperate
fully with the US and New York authorities with its home regulators, the European
Central Bank and the French Regulatory and Resolution Supervisory Authority (ACPR),
and with the other regulators across its worldwide network. Pursuant to the agreements
with NYDFS and the US Federal Reserve, Crédit Agricole's compliance program is subject
to regular reviews to evaluate its effectiveness, including a review by an independent
consultant appointed by NYDFS for a term of one year and annual reviews by an independent
consultant approved by the Federal Reserve.
EURIBOR/LIBOR
AND OTHER INDEXES
Crédit Agricole CIB and its parent company Crédit Agricole S.A., in their capacity
as contributors to a number of interbank rates, have received requests for information
from a number of authorities as part of investigations into: (i) the calculation of
the Libor (London Interbank Offered Rates) in a number of currencies, the Euribor
(Euro Interbank Offered Rate) and certain other market indices; and (ii) transactions
connected with these rates and indices. These demands covered several periods from
2005 to 2012.
As part of its cooperation with the authorities, Crédit Agricole S.A. and its subsidiary
Crédit Agricole CIB carried out investigations in order to gather the information
requested by the various authorities and in particular the American authorities -
the DOJ (Department of Justice) and CFTC (Commodity Future Trading Commission) - with
which they are in discussions. It is currently not possible to know the outcome of
these discussions, nor the date when they will be concluded.
Furthermore, Crédit Agricole CIB is currently under investigation opened by the
Attorney
General of the State of Florida on both the Libor and the Euribor.
Following its investigation and an unsuccessful settlement procedure, on 21 May
2014,
the European Commission sent a notification of grievances to Crédit Agricole S.A.
and to Crédit Agricole CIB pertaining to agreements or concerted practices for the
purpose and/or effect of preventing, restricting or distorting competition in derivatives
related to the Euribor.
In a decision dated 7 December 2016, the European Commission jointly fined Crédit
Agricole S.A. and Crédit Agricole CIB €114,654,000 for participating in a cartel in
euro interest rate derivatives. Crédit Agricole S.A. and Crédit Agricole CIB are challenging
this decision and have asked the European Court of Justice to overturn it.
Additionally, the Swiss competition authority, COMCO, is conducting an investigation
into the market for interest rate derivatives, including the Euribor, with regard
to Crédit Agricole S.A. and several Swiss and international banks. Moreover, in June
2016 the South Korean competition authority (KFTC) decided to close the investigation
launched in September 2015 into Credit Agricole CIB and the Libor index on various
currencies, Euribor and Tibor indices. The investigation into certain foreign exchange
derivatives (ABS-NDF) has been closed by the KFTC according to a decision notified
to Crédit Agricole CIB on 20 December 2018.
Concerning the two class actions in the United States of America in which Crédit
Agricole
S.A. and Crédit Agricole CIB have been named since 2012 and 2013 along with other
financial institutions, both as defendants in one ("Sullivan" for the Euribor) and
only Crédit Agricole S.A. as defendant for the other ("Lieberman" for Libor), the
"Lieberman" class action is at the preliminary stage that consists in the examination
of its admissibility; proceedings are still suspended before the US District Court
of New York State. Concerning the"Sullivan" class action, Crédit Agricole S.A. and
Crédit Agricole CIB introduced a motion to dismiss the applicants' claim. The US District
Court of New York State upheld the motion to dismiss regarding Crédit Agricole S.A.
and Crédit Agricole CIB in first instance. This decision is subject to appeal.
Since 1 July 2016, Crédit Agricole S.A. and Crédit Agricole CIB, together with
other
banks, are also party to a new class action suit in the United States ("Frontpoint")
relating to the SIBOR (Singapore Interbank Offered Rate) and SOR (Singapore Swap Offer
Rate) indices. After having granted a first motion to dismiss filed by Crédit Agricole
S.A. and Crédit Agricole CIB, the New York Federal District Court, ruling on a new
request by the plaintiffs, excluded Crédit Agricole S.A. from the Frontpoint case
on the grounds that it had not contributed to the relevant indexes. The Court considered,
however, taking into account recent developments in case law, that its jurisdiction
could apply to Crédit Agricole CIB, as well as to all the banks that are members of
the SIBOR index panel. The allegations contained in the complaint regarding the SIBOR/USD
index and the SOR index were also rejected by the court, therefore the index SIBOR/Singapore
dollar alone is still taken into account. On 26 December, the plaintiffs filed a new
complaint aimed at reintroducing into the scope of the Frontpoint case the alleged
manipulations of the SIBOR and SOR indexes that affected the transactions in US dollars.
Crédit Agricole CIB, alongside the other defendants, will oppose the terms of this
new complaint and has also filed a new motion to dismiss to contest the jurisdiction
maintained against it
These class actions are civil actions in which the plaintiffs claim that they are
victims of the methods used to set the Euribor, Libor, SIBOR and SOR rates, and seek
repayment of the sums they allege were unlawfully received, as well as damages and
reimbursement of costs and fees paid.
BANQUE SAUDI FRANSI
Crédit Agricole Corporate Investment Bank (Crédit Agricole CIB) has received a
Request
for Arbitration submitted by Banque Saudi Fransi (BSF) before the International Chamber
of Commerce (ICC). The dispute relates to the performance of a Technical Services
Agreement between BSF and Crédit Agricole CIB that is no longer in force. On 7 August
2018, BSF quantified its claim at SAR 1,011,670,654.00, the equivalent of about €232
million and reserved the right to submit additional claims. Crédit Agricole CIB totally
denies BSF's allegations and claim.
BONDS SSA
Several regulators have demanded information to Crédit Agricole S.A. and to Crédit
Agricole CIB for inquiries relating to activities of different banks involved in the
secondary trading of Bonds SSA (Supranational, Sub-Sovereign and Agencies) denominated
in American dollars. Through the cooperation with these regulators, Crédit Agricole
CIB proceeded to internal inquiries to gather the required information available.
On 20 December 2018, the European Commission issued a Statement of Objections to a
number of banks including Crédit Agricole S.A. and Crédit Agricole CIB within its
inquiry on a possible infringement of rules of European Competition law in the secondary
trading of Bonds SSA denominated in American dollars. Crédit Agricole S.A. and Crédit
Agricole CIB became aware of these objections and will issue a response.
Crédit Agricole CIB is included with other banks in a putative consolidated class
action before the United States District Court for the Southern District of New York.
That action was dismissed on 29 August 2018 on the basis that the plaintiffs failed
to allege an injury sufficient to give them standing. However the plaintiffs have
been given an opportunity to attempt to remedy that defect. The plaintiffs filed an
amended complaint on 7 November 2018. Crédit Agricole CIB as well as the other defendants
have filed motions to dismiss the amended complaint.
On 7 February 2019, another class action was filed against Crédit Agricole CIB
and
the other defendants named in the class action already pending before the United States
District Court for the Southern District of New York.
On 11 July 2018, Crédit Agricole S.A. and Crédit Agricole CIB were notified with
other
banks of a class action filed in Canada, before the Ontario Superior Court of Justice.
Another class action, not notified to date, would have been filed before the Federal
Court of Canada. It is not possible at this stage to predict the outcome of these
investigations, proceedings or class actions or the date on which they will end.
O'SULLIVAN AND
TAVERA
On November 9, 2017, a group of individuals, (or their families or estates), who
claimed
to have been injured or killed in attacks in Iraq filed a complaint ("O'Sullivan I")
against several banks including Crédit Agricole S.A., and its subsidiary Crédit Agricole
Corporate Investment Bank (Crédit Agricole CIB), in US Federal District Court in New
York.
On December 29, 2018, the same group of individuals, together with 57 new plaintiffs,
filed a separate action ("O'Sullivan II") against the same defendants.
On December 21, 2018, a different group of individuals filed a complaint ("Tavera'')
against the same defendants.
All three complaints allege that Crédit Agricole S.A., Crédit Agricole CIB, and
other
defendants conspired with Iran and its agents to violate US sanctions and engage in
transactions with Iranian entities in violation of the US Anti-Terrorism Act and the
Justice Against Sponsors of Terrorism Act. Specifically, the complaints allege that
Crédit Agricole S.A., Crédit Agricole CIB, and other defendants processed US dollar
transactions on behalf of Iran and Iranian entities in violation of sanctions administered
by the US Treasury Department's Office of Foreign Assets Control, which allegedly
enabled Iran to fund terrorist organizations that, as is alleged, attacked plaintiffs.
The plaintiffs are seeking an unspecified amount of compensatory damages.
On 2 March 2018, Crédit Agricole CIB and other defendants filed a motion to dismiss
the O' Sullivan I Complaint.
INTERCONTINENTAL
EXCHANGE, INC. ("ICE")
On January 15, 2019 a class action was filed before a federal court in New-York
(US
District Court Southern District of New-York) against the Intercontinental Exchange,
Inc. ("ICE") and a number of banks including Crédit Agricole S.A., Crédit Agricole
CIB and Crédit Agricole Securities-USA. This action has been filed by plaintiffs who
allege that they have invested in financial instruments indexed to the USD ICE LIBOR.
They accuse the banks of having collusively set the index USD ICE LIBOR at artificially
low levels since February 2014 and made thus illegal profits.
On January 31, 2019 a similar action has been filed before the US District Court
Southern
District of New-York, against a number of banks including Crédit Agricole S.A., Crédit
Agricole CIB and Crédit Agricole Securities-USA. On February 1, 2019, these two class
actions were consolidated for pre-trial purposes.
NOTE 14: SUBORDINATED
DEBT - ANALYSIS BY RESIDUAL MATURITY (IN CURRENCY OF ISSUE)
|
|
31.12.2018 |
31.12.2017 |
| € million |
≤ 3 months |
>3 months ≤ 1 year |
>1 year ≤ 5 years |
>5 years |
Total |
Total |
| Fixed-term subordinated debt |
|
|
|
2,983 |
2,983 |
2,668 |
| Euro |
|
|
|
1,500 |
1,500 |
1,250 |
| Other EU currencies |
|
|
|
|
|
|
| Dollar |
|
|
|
1,483 |
1,483 |
1,418 |
| Yen |
|
|
|
|
|
|
| Other currencies |
|
|
|
|
|
|
| Undated subordinated debt |
|
|
|
5,320 |
5,320 |
4,802 |
| Euro |
|
|
|
2,830 |
2,830 |
2,421 |
| Other EU currencies |
|
|
|
|
|
|
| Dollar |
|
|
|
2,490 |
2,490 |
2,381 |
| Yen |
|
|
|
|
|
|
| Other currencies |
|
|
|
|
|
|
| Participating securities and loans |
|
|
|
|
|
|
| Total principal |
|
|
|
8,303 |
8,303 |
7,470 |
| Accrued interest |
|
|
|
|
86 |
84 |
| Carrying amount |
|
|
|
|
8,389 |
7,554 |
Expenses relating to subordinated debt amounted to €368 million at 31.12.2018,
compared
to €329 million at 31.12.2017.
NOTE 15: CHANGES
IN EQUITY (BEFORE APPROPRIATION)
|
|
Shareholder's equity |
| € million |
Share capital |
Legal reserves |
Statutory reserves |
Share premiums, reserves and revaluation
adjustments |
Retained earnings |
Regulated provisions |
| Balance at 31 December 2016 |
7,852 |
603 |
|
1,593 |
761 |
|
| Dividends paid in respect of 2017 |
|
|
|
|
(241) |
|
| Increase/decrease |
|
|
|
|
|
|
| 2017 net income |
|
|
|
|
|
|
| Appropriation of 2016 parent company net income |
|
34 |
|
|
648 |
|
| Net charges/write-backs |
|
|
|
|
|
|
| Balance at 31 December 2017 |
7,852 |
637 |
|
1,593 |
1,168 |
|
| Dividends paid in respect of 2018 |
|
|
|
|
(1,236) |
|
| Increase/decrease (1) |
|
|
|
|
33 |
|
| 2018 net income |
|
|
|
|
|
|
| Appropriation of 2017 parent company net income |
|
131 |
|
|
2,482 |
|
| Net charges/write-backs |
|
|
|
|
|
|
| Balance at 31 December 2018 |
7,852 |
768 |
|
1,593 |
2,447 |
|
|
|
Shareholder's equity |
| € million |
Net income |
Total equity |
| Balance at 31 December 2016 |
682 |
11,491 |
| Dividends paid in respect of 2017 |
|
(241) |
| Increase/decrease |
|
|
| 2017 net income |
2,613 |
2,613 |
| Appropriation of 2016 parent company net income |
(682) |
|
| Net charges/write-backs |
|
|
| Balance at 31 December 2017 |
2,613 |
13,863 |
| Dividends paid in respect of 2018 |
|
(1,236) |
| Increase/decrease (1) |
|
33 |
| 2018 net income |
1,272 |
1,272 |
| Appropriation of 2017 parent company net income |
(2,613) |
|
| Net charges/write-backs |
|
|
| Balance at 31 December 2018 |
1,272 |
13,932 |
At 31 December 2018, the share capital comprised 290,801,346 shares with a par
value
of €27 each.
(1)
The application of the new model for provisioning credit risk on healthy loans and
receivables, intended to transpose the new credit risk provisioning model according
to the IFRS 9 approach to estimating ELs represent an impact of +€33 million on opening
shareholders' equity (retained earnings) at 1 January 2018.
NOTE 16: ANALYSIS
OF THE BALANCE SHEET BY CURRENCY
|
|
31.12.2018 |
31.12.2017 |
| € million |
Assets |
Liabilities |
Assets |
Liabilities |
| Euro |
225,573 |
215,882 |
251,052 |
237,273 |
| Other EU currencies |
18,288 |
33,517 |
22,833 |
33,411 |
| Dollar |
157,526 |
149,212 |
126,516 |
133,406 |
| Yen |
51,104 |
38,104 |
32,995 |
29,693 |
| Other currencies |
28,902 |
44,678 |
28,416 |
28,029 |
| Total |
481,393 |
481,393 |
461,812 |
461,812 |
NOTE 17: TRANSACTIONS
WITH SUBSIDIARIES, AFFILIATES AND EQUITY INVESTMENTS
| € million |
31.12.2018 |
31.12.2017 |
| Loans and receivables |
32,990 |
43,741 |
| Credit and other financial institutions |
12,496 |
20,003 |
| Customers |
17,723 |
20,833 |
| Bonds and other fixed income securities |
2,771 |
2,905 |
| Debt |
53,188 |
54,409 |
| Credit and financial institutions |
27,100 |
30,572 |
| Customers |
14,591 |
14,117 |
| Debt securities and subordinated debts |
11,497 |
9,720 |
| Commitments given |
51,986 |
53,490 |
| Financing commitments given to credit institutions |
591 |
676 |
| Financing commitments given to customers |
27,292 |
36,649 |
| Guarantee given to credit and other financial institutions |
8,008 |
7,259 |
| Guarantees given to customers |
3,456 |
2,532 |
| Securities acquired with repurchase options |
6,265 |
833 |
| Other commitments given |
6,374 |
5,541 |
NOTE 18: NON-SETTLED
FOREIGN EXCHANGE TRANSACTIONS AND AMOUNTS PAYABLE IN FOREIGN
CURRENCIES
|
|
|
|
Published version |
Corrected version |
|
|
31.12.2018 |
31.12.2017 |
| € million |
To be received |
To be delivered |
To be received |
To be delivered |
To be received |
To be delivered |
| Spot foreign-exchange transactions |
126,034 |
126,052 |
106,325 |
106,450 |
147,934 |
147,978 |
| Foreign currencies |
112,516 |
109,391 |
97,294 |
97,013 |
131,821 |
134,569 |
| Euro |
13,518 |
16,661 |
9,031 |
9,437 |
16,113 |
13,409 |
| Forward currency transactions |
1,774,176 |
1,777,225 |
485,237 |
485,489 |
1,491,521 |
1,492,124 |
| Foreign currencies |
1,396,438 |
1,410,018 |
389,555 |
391,099 |
1,131,356 |
1,140,051 |
| Euro |
377,738 |
367,207 |
95,682 |
94,390 |
360,165 |
352,073 |
| Foreign currency denominated loans and borrowings |
418 |
827 |
4,005 |
3,975 |
4,141 |
4,794 |
| Total |
1,900,628 |
1,904,104 |
595,567 |
595,914 |
1,643,596 |
1,644,896 |
The data published to 31/12/2017 only included branch data.
The corrected version covers the entire scope.
NOTE 19: TRANSACTIONS
ON FORWARD FINANCIAL INSTRUMENTS
|
|
31.12.2018 |
31.12.2017 |
| € million |
Hedging transactions |
Other transactions |
Total(2) |
Hedging transactions |
Other transactions |
Total |
| Futures and forwards |
118,637 |
13,641,439 |
13,760,076 |
5,457 |
13,382,216 |
13,387,673 |
| Exchange-traded (1) |
4,034 |
7,233,516 |
7,237,550 |
1,883 |
7,303,048 |
7,304,931 |
| Interest-rate futures |
|
7,132,802 |
7,132,802 |
|
7,285,516 |
7,285,516 |
| Currency forwards |
|
82,572 |
82,572 |
|
9,267 |
9,267 |
| Equity and stock index instruments |
|
2,451 |
2,451 |
|
989 |
989 |
| Other futures |
4,034 |
15,691 |
19,725 |
1,883 |
7,276 |
9,159 |
| Over-the-counter (1) |
114,603 |
6,407,923 |
6,522,526 |
3,574 |
6,079,168 |
6,082,742 |
| Interest rate swaps |
41,560 |
2,429,697 |
2,471,257 |
41 |
2,429,408 |
2,429,449 |
| Fx swaps |
72,903 |
3,931,015 |
4,003,918 |
3,533 |
2,654,028 |
2,657,561 |
| FRA |
|
2,061 |
2,061 |
|
670 |
670 |
| Equity and stock index instruments |
|
38,247 |
38,247 |
|
24,335 |
24,335 |
| Other futures |
140 |
6,903 |
7,043 |
|
970,727 |
970,727 |
| Options |
1,119 |
1,993,659 |
1,994,778 |
3,120 |
1,778,160 |
1,781,280 |
| Exchange-traded |
|
218,024 |
218,024 |
|
166,032 |
166,032 |
| Exchange traded interest rate futures |
|
|
|
|
|
|
| Bought |
|
183,862 |
183,862 |
|
123,478 |
123,478 |
| Sold |
|
13,089 |
13,089 |
|
28,087 |
28,087 |
| Equity and stock index instruments |
|
|
|
|
|
|
| Bought |
|
7,572 |
7,572 |
|
4,627 |
4,627 |
| Sold |
|
9,456 |
9,456 |
|
5,187 |
5,187 |
| Currency futures |
|
|
|
|
|
|
| Bought |
|
1,781 |
1,781 |
|
1,812 |
1,812 |
| Sold |
|
2,264 |
2,264 |
|
2,833 |
2,833 |
| Other futures |
|
|
|
|
|
|
| Bought |
|
|
|
|
3 |
3 |
| Sold |
|
|
|
|
5 |
5 |
| Over-the counter |
1,119 |
1,775,635 |
1,776,754 |
3,120 |
1,612,128 |
1,615,248 |
| Interest rate swap options |
|
|
|
|
|
|
| Bought |
554 |
352,423 |
352,977 |
|
362,480 |
362,480 |
| Sold |
58 |
367,643 |
367,701 |
|
342,495 |
342,495 |
| Other interest rate forwards |
|
|
|
|
|
|
| Bought |
507 |
231,276 |
231,783 |
|
218,634 |
218,634 |
| Sold |
|
233,393 |
233,393 |
|
232,349 |
232,349 |
| Equity and stock index instruments |
|
|
|
|
|
|
| Bought |
|
5,108 |
5,108 |
|
1,269 |
1,269 |
| Sold |
|
4,351 |
4,351 |
|
16,404 |
16,404 |
| Currency futures |
|
|
|
|
|
|
| Bought |
|
257,738 |
257,738 |
|
207,126 |
207,126 |
| Sold |
|
283,283 |
283,283 |
|
210,709 |
210,709 |
| Other futures |
|
|
|
|
|
|
| Bought |
|
175 |
175 |
|
162 |
162 |
| Sold |
|
156 |
156 |
|
135 |
135 |
| Credit derivative |
|
|
|
|
|
|
| Bought |
|
26,943 |
26,943 |
3,120 |
9,833 |
12,953 |
| Sold |
|
13,146 |
13,146 |
|
10,532 |
10,532 |
| Total |
119,756 |
15,635,098 |
15,754,854 |
8,577 |
15,160,376 |
15,168,953 |
(1)
The amounts stated under futures and forwards correspond to aggregate long and short
positions (interest rate swaps and interest rate swaptions) or to aggregate purchases
and sales of contracts (other contracts).
(2)
Including €757,673 million with Crédit Agricole S.A. at 31 December 2018.
19.1 Forward financial
instruments - Fair value
|
|
31.12.2018 |
31.12.2017 |
|
|
Total fair value |
|
Total fair value |
|
| € million |
Assets |
Liabilities |
Notional total |
Assets |
Liabilities |
Notional total |
| Instruments de taux d'intérêts |
97,980 |
113,137 |
10,988,925 |
95,099 |
97,357 |
11,023,158 |
| Futures |
530 |
529 |
2,630,775 |
|
|
2,061,460 |
| F.R.A. |
1,383 |
1,059 |
2,061 |
353 |
352 |
670 |
| Swaps de taux d'intérêts |
79,579 |
94,866 |
6,973,285 |
74,549 |
75,687 |
7,653,505 |
| Options de taux |
12,893 |
12,581 |
917,628 |
16,028 |
16,377 |
856,540 |
| Caps-floors-collars |
3,595 |
4,102 |
465,176 |
4,169 |
4,941 |
450,983 |
| Instruments de devises |
203,711 |
96,792 |
1,019,764 |
9,202 |
8,196 |
3,089,309 |
| Operations fermes de change |
36,020 |
39,545 |
380,899 |
6,765 |
6,413 |
2,657,562 |
| Options de change |
3,546 |
2,867 |
545,066 |
2,434 |
1,783 |
422,480 |
| Futures |
164,145 |
54,380 |
93,799 |
3 |
|
9,267 |
| Autres Instruments |
8,806 |
8,143 |
134,374 |
3,363 |
2,776 |
85,759 |
| Dérivés sur actions & indices boursiers |
7,723 |
3,565 |
89,447 |
2,840 |
1,911 |
52,812 |
| Dérivés sur métaux précieux |
40 |
43 |
4,824 |
26 |
27 |
824 |
| Dérivés sur produits de base |
|
|
14
|
|
|
|
| Dérivés de credit |
1,043 |
4,535 |
40,089 |
497 |
838 |
32,123 |
| Sous-total |
310,497 |
218,072 |
12,143,063 |
107,664 |
108,329 |
14,198,226 |
| Opérations de change à terme / Trading |
364,276 |
390,256 |
3,611,791 |
13,043 |
14,292 |
970,727 |
| Opérations de change à terme / Banking |
|
|
|
|
|
|
| Sous-total |
364,276 |
390,256 |
3,611,791 |
13,043 |
14,292 |
970,727 |
| Total général |
674,773 |
608,328 |
15,754,854 |
120,707 |
122,621 |
15,168,953 |
19.2 Forward financial
instruments - Notional outstanding's analysis by residual maturity
| € million |
Over-the-counter |
Exchange-traded |
| Notional amount outstanding |
≤ 1 year |
>1 year ≤ 5 years |
>5 years |
< 1 year |
>1 year ≤ 5 years |
>5 years |
| Interest rate instruments |
871,523 |
1,450,518 |
1,337,132 |
3,680,705 |
1,355,949 |
2,293,098 |
| Futures |
|
|
|
2,071,673 |
751 |
558,351 |
| FRA |
1,765 |
|
296 |
|
|
|
| Interest rate swaps |
793,064 |
822,991 |
855,203 |
1,488,543 |
1,355,198 |
1,658,286 |
| Interest rate options |
1,355 |
498,229 |
221,094 |
120,489 |
|
76,461 |
| Caps, floors and collars |
75,339 |
129,298 |
260,539 |
|
|
|
| Foreign currency and gold |
686,401 |
172,697 |
74,050 |
84,944 |
|
1,672 |
| Currency futures |
241,479 |
115,515 |
22,537 |
1,368 |
|
|
| Currency options |
432,327 |
57,182 |
51,513 |
4,044 |
|
|
| Futures |
12,595 |
|
|
79,532 |
|
1,672 |
| Other instruments |
44,172 |
15,782 |
35,216 |
22,585 |
1,684 |
14,935 |
| Equity and index derivatives |
20,140 |
11,347 |
19,457 |
21,884 |
1,684 |
14,935 |
| Precious metal derivatives |
4,119 |
17 |
|
688 |
|
|
| Commodity derivatives |
|
|
|
14 |
|
|
| Credit derivatives |
19,912 |
4,418 |
15,759 |
|
|
|
| Sub-total |
1,602,096 |
1,638,997 |
1,446,398 |
3,788,234 |
1,357,633 |
2,309,705 |
| Currency futures trading book |
2,602,419 |
382,064 |
627,308 |
|
|
|
| Currency futures banking book |
|
|
|
|
|
|
| Sub-total |
2,602,419 |
382,064 |
627,308 |
|
|
|
| Total |
4,204,515 |
2,021,061 |
2,073,706 |
3,788,234 |
1,357,633 |
2,309,705 |
| € million |
31.12.2018 |
31.12.2017 |
| Notional amount outstanding |
Total |
Total |
| Interest rate instruments |
10,988,925 |
11,023,158 |
| Futures |
2,630,775 |
2,061,460 |
| FRA |
2,061 |
670 |
| Interest rate swaps |
6,973,285 |
7,653,505 |
| Interest rate options |
917,628 |
856,540 |
| Caps, floors and collars |
465,176 |
450,983 |
| Foreign currency and gold |
1,019,764 |
3,089,309 |
| Currency futures |
380,899 |
2,657,562 |
| Currency options |
545,066 |
422,480 |
| Futures |
93,799 |
9,267 |
| Other instruments |
134,374 |
85,759 |
| Equity and index derivatives |
89,447 |
52,812 |
| Precious metal derivatives |
4,824 |
824 |
| Commodity derivatives |
14 |
|
| Credit derivatives |
40,089 |
32,123 |
| Sub-total |
12,143,063 |
14,198,226 |
| Currency futures trading book |
3,611,791 |
970,727 |
| Currency futures banking book |
|
|
| Sub-total |
3,611,791 |
970,727 |
| Total |
15,754,854 |
15,168,953 |
19.3 Forward financial
instruments-counterparty risk
Derivatives represent a potential credit risk of €7,463 million at 31 December
2018
compared with €7,353 million at 31 December 2017, after taking into account the compensation
effects.
NOTE 20: NET INTEREST
AND SIMILAR INCOME
| € million |
31.12.2018 |
31.12.2017 |
| Interbank transactions |
2,167 |
976 |
| Customer transactions |
4,717 |
3,412 |
| Bonds and other fixed-income securities (see Note 21) |
399 |
302 |
| Debt securities |
86 |
157 |
| Other interest and similar income |
224 |
758 |
| Interest and similar income (1) |
7,593 |
5,605 |
| Interbank transactions |
(2,830) |
(1,709) |
| Customer transactions |
(2,746) |
(1,252) |
| Bonds and other fixed-income securities |
(24) |
(41) |
| Debt securities |
(1,014) |
(913) |
| Other interest and similar income |
(200) |
(450) |
| Interest and similar expense (2) |
(6,814) |
(4,365) |
| Net interest and similar income |
779 |
1,240 |
(1)
Including income with Crédit Agricole S.A. at 31.12.2018: €26 million.
(2)
Including expenses with Crédit Agricole S.A. at 31.12.2018: €781 million.
NOTE 21: INCOME
FROM SECURITIES
|
|
Fixed Income securities |
Variable-income securities |
| € million |
31.12.2018 |
31.12.2017 |
31.12.2018 |
31.12.2017 |
| Investment in subsidiaries and affiliates, equity investments
and other long-term
equity investments
|
|
|
282 |
291 |
| Short term investment securities and medium term portfolio
securities |
221 |
182 |
4 |
117 |
| Long-term investment securities |
178 |
120 |
|
|
| Other securities transactions |
|
|
|
|
| Income from securities |
399 |
302 |
286 |
408 |
NOTE 22: NET COMMISSION
AND FEE INCOME
|
|
31.12.2018 |
31.12.2017 |
| € million |
Income |
Expense |
Net |
Income |
Expense |
Net |
| Interbank transactions |
60 |
(104) |
(44) |
40 |
(95) |
(55) |
| Customer transactions |
611 |
(35) |
576 |
607 |
(17) |
590 |
| Securities transactions |
7 |
(69) |
(62) |
6 |
(56) |
(50) |
| Foreign exchange transactions |
4 |
(35) |
(31) |
|
(30) |
(30) |
| Forward financial instruments and other off-balance sheet
transactions |
133 |
(135) |
(2) |
178 |
(116) |
62 |
| Financial services (see Note 22.1) |
110 |
(28) |
82 |
116 |
(32) |
84 |
| Total net fee and commission income (1) |
925 |
(406) |
519 |
947 |
(346) |
601 |
(1)
Including net commissions with Crédit Agricole S.A. at 31 December 2018: €26 million.
22.1 Banking and
financial services
| € million |
31.12.2018 |
31.12.2017 |
| Net income from managing mutual funds and securities
on behalf of customers |
47 |
54 |
| Net income from payment instruments |
5 |
5 |
| Other net financial services income (expense) |
30 |
25 |
| Financial services |
82 |
84 |
NOTE 23: GAINS
(LOSSES) ON TRADING BOOKS
| € million |
31.12.2018 |
31.12.2017 |
| Gains (losses) on trading securities |
(297) |
349 |
| Gains (losses) on forward financial instruments |
898 |
1,439 |
| Gains (losses) on foreign exchange and similar financial
instruments |
1,550 |
535 |
| Net gains (losses) on trading book |
2,151 |
2,323 |
NOTE 24: GAINS
(LOSSES) ON SHORT TERM INVESTMENT PORTFOLIOS AND SIMILAR
| € million |
31.12.2018 |
31.12.2017 |
| Short term investment securities |
|
|
| Impairment losses |
(4) |
(19) |
| Reversals of impairment losses |
19 |
12 |
| Net losses/reversals |
15 |
(7) |
| Gains on disposals |
65 |
35 |
| Losses on disposals |
(67) |
(50) |
| Net gains (losses) on disposals |
(2) |
(15) |
| Net gain (losses) on short term investment securities |
13 |
(22) |
| Medium term portfolio securities |
|
|
| Impairment losses |
(1) |
(1) |
| Reversals of impairment losses |
|
5 |
| Net losses/reversals |
(1) |
4 |
| Gains on disposals |
|
3 |
| Losses on disposals |
|
|
| Net gains (losses) on disposals |
|
3 |
| Net gain (losses) on medium term investment portfolio
securities |
(1) |
7 |
| Net gain (losses) on short term investment portfolios
and similar |
12 |
(15) |
NOTE 25: OPERATING
EXPENSES
25.1 Employee
expenses
| € million |
31.12.2018 |
31.12.2017 |
| Salaries |
(994) |
(969) |
| Social security expenses |
(314) |
(287) |
| Incentive plans |
(27) |
(24) |
| Employee profit-sharing |
|
|
| Payroll-related tax |
(42) |
(39) |
| Total employee expenses |
(1,377) |
(1,319) |
| Charge-backs and reclassification of employee expenses |
5 |
5 |
| Net expenses (1) |
(1,372) |
(1,314) |
(1)
Including pension expenses at 31 December 2018: € -89 million.
Including pension expenses at 31 December 2017: € -83 million.
25.2 Average number
of headcount
| In number |
31.12.2018 |
31.12.2017 |
| Managers |
4,212 |
3,690 |
| Non-managers |
298 |
338 |
| Managers and non-managers of foreign branches |
2,860 |
2,740 |
| Total |
7,370 |
6,768 |
| Of which |
|
|
| France |
4,510 |
4,028 |
| Foreign |
2,860 |
2,740 |
25.3 Other administrative
expenses
| € million |
31.12.2018 |
31.12.2017 |
| Taxes other than on income or payroll-related |
(64) |
(69) |
| External services |
(1,027) |
(880) |
| Other administrative expenses |
(118) |
(109) |
| Total administrative expenses |
(1,209) |
(1,058) |
| Charge-backs and reclassification of employee expenses |
198 |
100 |
| Total |
(1,011) |
(958) |
NOTE 26: COST
OF RISK
| € million |
31.12.2018 |
31.12.2017 |
| Depreciation charges to provisions and impairment |
(568) |
(1,416) |
| Impairment on doubtful loans and receivables |
(377) |
(702) |
| Other depreciation and impairment losses |
(191) |
(714) |
| Reversal of provisions and impairment losses |
1,146 |
1,511 |
| Reverval of impairment losses on doubtful loans and receivables
(1) |
742 |
738 |
| Other reversals of provisions and impairment losses (2) |
404 |
773 |
| Change in provisions and impairment |
578 |
95 |
| Losses on non-impaired bad debts |
(12) |
(66) |
| Losses on impaired bad debts |
(448) |
(413) |
| Recoveries on loans written off |
77 |
84 |
| Cost of risk |
195 |
(300) |
(1)
Including € 403 million on bad debts and doubtful loans at 31 December 2018.
(2)
Including € 44 million used to provision risk on the liabilities at 31 December 2018.
NOTE 27: NET GAIN
(LOSSES) ON FIXED ASSETS
| € million |
31.12.2018 |
31.12.2017 |
| Financial investments |
|
|
| Impairment losses |
|
|
| Long-term investment securities |
|
|
| Investments in subsidiaries and affiliates, equity investments
and other long term
equity investments
|
(23) |
(541) |
| Reversals of impairments losses |
|
|
| Long-term investment securities |
|
|
| Investments in subsidiaries and affiliates, equity investments
and other long term
equity investments (1) |
58 |
511 |
| Net losses/reversals |
35 |
(30) |
| Long-term investment securities |
|
|
| Investments in subsidiaries and affiliates, equity investments
and other long term
equity investments
|
35 |
(30) |
| Gains on disposals |
|
|
| Long-term investment securities |
|
9 |
| Investments in subsidiaries and affiliates, equity investments
and other long term
equity investments (2) |
4 |
1,219 |
| Losses on disposals |
|
|
| Long-term investment securities |
|
(19) |
| Investments in subsidiaries and affiliates, equity investments
and other long term
equity investments
|
(19) |
(3) |
| Losses on receivables from equity investments |
|
|
| Net gain (losses) on disposals |
(15) |
1,206 |
| Long-term investment securities |
|
(10) |
| Investments in subsidiaries and affiliates, equity investments
and other long term
equity investments
|
(15) |
1,216 |
| Net gain (losses) |
20 |
1,176 |
| Property, plant and equipment and intangible assets |
|
|
| Disposal gains |
|
5 |
| Disposal losses |
|
|
| Net gain (losses) |
|
5 |
| Net gain (losses) on fixed assets |
20 |
1,181 |
(1)
In 2017 including a €477 million reversal of provisions for liabilities and charges
for net negative situation.
(2)
In 2017 including a gain of €1,215 million on the disposal of the Banque Saudi Fransi
shares.
NOTE 28: INCOME
TAX CHARGE
| € million |
31.12.2018 |
31.12.2017 |
| Income tax charge (1) |
(415) |
(514) |
| Other tax |
|
|
| Total |
(415) |
(514) |
(1)
Crédit Agricole CIB is a member of the Crédit Agricole S.A. tax consolidation group.
The tax agreement between Crédit Agricole CIB and its parent company enables it to
transfer its tax deficits.
As a part of the tax consolidation agreement, a tax income of €1 million to Crédit
Agricole S.A. was recognised at 31 December 2018.
A net depreciation of tax provision of € 116 million, corresponding to Crédit Agricole
S.A. compensated tax loss, but still due, as individuals, by the subsidiaries of the
subgroup towards Crédit Agricole CIB, was also recognised at 31 December 2018.
NOTE 29: OPERATIONS
IN NON-COOPERATIVE STATES OR TERRITORIES
As at 31 December 2018, Crédit Agricole CIB has no direct or indirect presence
in
non-cooperative states or territories within the meaning of Article 238-0 A of the
French General Tax Code.
3. STATUTORY AUDITORS'
REPORT ON THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2018
This is a translation into English of the statutory auditors' report on the financial
statements of the Company issued in French and it is provided solely for the convenience
of English-speaking users.
This statutory auditors' report includes information required by European regulations
and French law, such as information about the appointment of the statutory auditors
or verification of the management report and other documents provided to the shareholders.
This report should be read in conjunction with, and construed in accordance with,
French law and professional auditing standards applicable in France.
OPINION
In compliance with the engagement entrusted to us by your General Meeting of Shareholders,
we have audited the accompanying financial statements of Crédit Agricole Corporate
and Investment Bank for the year ended 31 December 2018.
In our opinion, the financial statements give a true and fair view of the assets
and
liabilities and of the financial position of the Company as at 31 December 2018 and
of the results of its operations for the year then ended in accordance with French
accounting principles. The audit opinion expressed above is consistent with our report
to the Audit Committee.
BASIS FOR OPINION
We conducted our audit in accordance with professional standards applicable in
France.
We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Statutory
Auditors' Responsibilities for the Audit of the Financial Statements section of our
report.
Independence
We conducted our audit engagement in compliance with independence rules applicable
to us, for the period from 1 January 2018 to the date of our report and specifically
we did not provide any prohibited non-audit services referred to in Article 5 (1)
of Regulation (EU) No 537/2014 or in the French Code of Ethics for Statutory Auditors
(Code de déontologie de la profession de commissaire aux comptes).
EMPHASIS OF MATTER
Without qualifying our opinion, we draw your attention to the changes in accounting
policy presented in Note 2 "Accounting rules and procedures" to the financial statements
relating to:
| ― |
new ANC regulations or amendments to existing ANC regulations;
|
| ― |
the new credit risk provisioning model for performing loans,
for use in the financial
statements as from 1 January 2018 for the estimate of expected credit losses according
to the new standard IFRS 9.
|
JUSTIFICATION
OF ASSESSMENTS - KEY AUDIT MATTERS
In accordance with the requirements of Articles L.823-9 and R.823-7 of the French
Commercial Code (Code de commerce) relating to the justification of our assessments,
we inform you of the key audit matters relating to risks of material misstatement
that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period, as well as how we addressed those risks.
These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on specific items of the financial statements.
TAX, LEGAL AND
COMPLIANCE RISKS
♦ Risk identified
Crédit Agricole Corporate and Investment Bank is subject to a number of investigations
and requests for regulatory information from different regulators. These concern in
particular the Euribor/ Libor and SSA Bonds matters with authorities from various
countries (USA, UK and Switzerland) and the European Union.
A number of tax investigations are also ongoing in France and in certain countries
where the Group operates.
Deciding whether or not to recognise a provision and the amount of that provision
requires the use of judgement, given that it is difficult to assess the outcome of
ongoing disputes or the final tax impacts of certain structural transactions Given
its sensitivity to these assumptions, thus constituting a significant risk of material
misstatement in the financial statements, we deemed the measurement of provisions
for tax, legal and compliance risks to be a key audit matter.
The various ongoing investigations and requests for information (Euribor/ Libor,
SSA
Bonds and other indices) are presented in Note 13.2 to the financial statements.
♦ Our response
The risk of a significant outflow of funds concerns a limited number of matters
that
we monitor on a regular basis.
We gained an understanding of the procedure for measuring the risks and, where
applicable,
the provisions associated with these matters, notably through quarterly exchanges
with management and in particular the Legal, Compliance and Tax departments of the
Group.
Our work consisted primarily in:
| ― |
examining the assumptions used to determine provisions based
on available information
(documentation prepared by the Legal department or legal counsels of Crédit Agricole
Corporate and Investment Bank, correspondence from regulators and minutes of Legal
Risks Committee meetings);
|
| ― |
gaining an understanding of the analyses or findings of the bank's
legal counsels
and their responses to our requests for confirmation;
|
| ― |
as regards tax risks in particular, examining, with guidance
from our specialists,
the Group's responses submitted to the relevant authorities, as well as the risk estimates
carried out by the bank;
|
| ― |
assessing, accordingly, the level of provisioning at 31 December
2018.
|
Lastly, we examined the related disclosures provided in the notes to the financial
statements.
CREDIT RISK AND
ESTIMATE OF EXPECTED LOSSES ON PERFORMING, UNDERPERFORMING AND NON-PERFORMING
LOANS IN THE CONTEXT OF THE CHANGE IN ACCOUNTING POLICY AS OF 1 JANUARY 2018
♦ Risk identified
Within the scope of its corporate and investment banking operations, your Company
originates and structures financing for large corporate clients in France and abroad.
When a loan is doubtful, the probable loss is taken into account through impairment
recorded as a deduction from assets in the balance sheet. Losses are taken into account
through provisions recorded as liabilities in the balance sheet. Furthermore, your
Company also recognized provisions, as liabilities in its balance sheet, designed
to cover client risks not affected individually such as provisions for country risk
or sectoral provisions generally calculated based on the IFRS 9 models for the estimation
of expected losses.
Given the significant judgment exercised by management in determining such value
adjustments
on the one hand, and the changes resulting from the change in accounting policy on
the other (adaptation of the operational mechanism for calculating the impairment
and provisions, new information systems, inputs, new control framework, etc.), we
deemed the estimation of provisions for performing loans (impaired on a collective
basis) and non-performing loans (impaired on an individual basis) for financing granted
to companies in the maritime and energy sectors, both at the date of the first-time
application of the change in accounting policy and at 31 December 2018, to be a key
audit matter, due to an uncertain economic environment, the complexity of identifying
exposures where there is a risk of non-recovery and the degree of judgment needed
to estimate recovery flows.
The financing granted is recorded under loans and receivables to credit institutions
and loans and receivables to customers. Impairment is recognized as a deduction from
assets in the balance sheet or as a liability and provisions/reversals are recorded
under cost of risk.
Probable losses relating to off-balance-sheet commitments are taken into account
through
provisions under liabilities in the balance sheet.
See Notes 1.1, 2, 3, 13 and 26 to the financial statements.
♦ Our response
We examined the procedures implemented by the Risk Management department to categorise
loans and measure the amount of expected losses recorded, in order to assess whether
the estimates used were based on methods correctly documented and described in the
notes to the financial statements.
We tested the key controls implemented by the bank for the annual portfolio reviews,
the updating of credit ratings, the identification of underperforming or non-performing
loans and the measurement of impairment. We also familiarized ourselves with the main
findings of the primary bank entities' specialized committees in charge of monitoring
underperforming and non-performing loans. Regarding impairment measured on a collective
basis, we:
| ― |
asked experts to assess the methods and measurements for the
various expected loss
inputs and calculation models;
|
| ― |
examined the methodology used to identify significant increases
in credit risk;
|
| ― |
tested the controls for the transfer of the data used to calculate
expected losses
or the reconciliations between the bases used to calculate expected losses and the
accounting data;
|
| ― |
carried out independent expected loss calculations on the basis
of samples, compared
the calculated amount with the recognized amount and examined the adjustments made
by management where applicable;
|
| ― |
also assessed the analyses carried out by management on Crédit
Agricole Corporate
and Investment Bank's corporate bank's exposures with a deteriorated outlook.
|
Regarding individually calculated value adjustments, we:
| ― |
examined the estimates used for Crédit Agricole Corporate and
Investment Bank's non-performing
significant counterparties and, on the basis of a sample of credit files,
|
| ― |
examined the factors underlying the main assumptions used to
assess the expected recovery
flows, in particular with regard to valuing collateral.
|
Lastly, we examined the disclosures regarding credit risk provided in the notes
to
the financial statements.
RISK ON THE MEASUREMENT
OF DERIVATIVE INSTRUMENTS
♦ Risk identified
Your Company originates, structures, sells and trades market products, including
derivative
financial instruments, for companies, financial institutions and major issuers.
These derivative financial instruments are accounted for in accordance with the
provisions
of Title 5 "Financial futures" of Book II "Specific transactions" of Regulation ANC
2014-07 of 26 November 2014.
In particular, transactions entered into for trading purposes are marked to market,
and any corresponding gains and losses are recognized in the profit and loss account.
These financial instruments are considered as complex when their valuation requires
using of significant not observable market inputs. We deemed the valuation of complex
derivative financial instruments to be a key audit matter as it requires the exercise
of judgment on the part of management, particularly concerning:
| ― |
the determination of valuation inputs that are not observable
in the market for a
single instrument;
|
| ― |
the use of internal and non-standard valuation models;
|
| ― |
the estimate of the main valuation adjustments to take into account
counterparty or
liquidity risks, for example;
|
| ― |
the analysis of any valuation differences with counterparties
noted in connection
with margin calls or the disposal of instruments.
|
The balance of financial future transactions in the profit and loss account is
€898m
as at 31 December 2018. See Notes 1.8, 19 and 23.
♦ Our response
We gained an understanding of the processes and controls put in place by your Company
to identify, measure and recognise derivative financial instruments.
We examined some key controls such as the independent validation of the valuation
models and the independent verification of the measurement inputs by the Risk Management
and Permanent Control department. We also examined the system governing the recognition
of these instruments and their accounting categorisation.
With the support of audit team experts, we carried out independent valuations or
analysed
the valuations performed by your Company. For valuations of complex derivative financial
instruments using internal models and/or non-observable inputs, and we examined the
assumptions, inputs, methodologies and models used on 31 December 2018 by your Company
to estimate the main valuation adjustments and the justification by the Direction.
We also examined your Company's valuations in the light of the main differences
observed
in margin calls and the losses and/or gains in the event of the disposal of derivative
financial instruments.
SPECIFIC VERIFICATIONS
We have also performed, in accordance with professional standards applicable in
France,
the specific verifications required by laws and regulations.
Information given in the management report and in the other documents with respect
to the financial position and the financial statements provided to the shareholders
We have no matters to report as to the fair presentation and the consistency with
the financial statements of the information given in the Board of Directors' management
report and in the other documents with respect to the financial position and the financial
statements provided to the Shareholders, with the exception of the following matter.
Concerning the fair presentation and the consistency with the financial statements
of the information relating to payment deadlines mentioned in Article D. 441-4 of
the French Commercial Code (Code de commerce), we have the following matter to report:
as indicated in the management report, this information does not include banking and
related transactions as the Company considers that such information is not within
the scope of the information to be provided.
Report on Corporate
Governance
We attest that the Board of Directors' Report on Corporate Governance sets out
the
information required by Articles L. 22537-3 and L. 225-37-4 of the French Commercial
Code (Code de commerce).
Concerning the information given in accordance with the requirements of Article
L.
225-37-3 of the French Commercial Code (Code de commerce) relating to remunerations
and benefits received by the directors and any other commitments made in their favor,
we have verified its consistency with the financial statements, or with the underlying
information used to prepare these financial statements and, where applicable, with
the information obtained by your Company from controlling and controlled companies.
Based on these procedures, we attest the accuracy and fair presentation of this information.
With respect to the information relating to items that your Company considered
likely
to have an impact in the event of a public purchase or exchange offer, provided pursuant
to Article L. 225-37-5 of the French Commercial Code (Code de commerce), we have agreed
these to the source documents communicated to us. Based on our work, we have no observations
to make on this information.
Other information
In accordance with French law, we have verified that the required information concerning
the purchase of investments and controlling interests has been properly disclosed
in the management report.
REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS
Appointment of
the Statutory Auditors
We were appointed Statutory Auditors of Crédit Agricole Corporate and Investment
Bank
by the General Meetings of Shareholders held on 30 April 2004 for PricewaterhouseCoopers
Audit and on 20 May 1997 for Ernst & Young et Autres.
At 31 December 2018, PricewaterhouseCoopers Audit and Ernst & Young et Autres
were
in the fifteenth and the twenty-second consecutive year of their engagement, respectively.
RESPONSIBILITIES
OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL
STATEMENTS
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with French accounting principles and for such internal control
as management determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error. In preparing
the financial statements, management is responsible for assessing the Company's ability
to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless it is expected to liquidate
the Company or to cease operations.
The Audit Committee is responsible for monitoring the financial reporting process
and the effectiveness of internal control and risks management systems and where applicable,
its internal audit, regarding the accounting and financial reporting procedures.
The financial statements were approved by the Board of Directors.
STATUTORY AUDITORS'
RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Objectives and
audit approach
Our role is to issue a report on the financial statements. Our objective is to
obtain
reasonable assurance about whether the financial statements as a whole are free from
material misstatement. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with professional standards will
always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements. As specified in Article L.823-10-1 of the
French Commercial Code (Code de commerce), our statutory audit does not include assurance
on the viability of the Company or the quality of management of the affairs of the
Company.
As part of an audit conducted in accordance with professional standards applicable
in France, the statutory auditor exercises professional judgment throughout the audit
and furthermore:
| ― |
Identifies and assesses the risks of material misstatement of
the financial statements,
whether due to fraud or error, designs and performs audit procedures responsive to
those risks, and obtains audit evidence considered to be sufficient and appropriate
to provide a basis for his opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control;
|
| ― |
Obtains an understanding of internal control relevant to the
audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the internal control;
|
| ― |
Evaluates the appropriateness of accounting policies used and
the reasonableness of
accounting estimates and related disclosures made by management in the financial statements;
|
| ― |
Assesses the appropriateness of management's use of the going
concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the Company's ability to
continue as a going concern. This assessment is based on the audit evidence obtained
up to the date of his audit report. However, future events or conditions may cause
the Company to cease to continue as a going concern. If the statutory auditor concludes
that a material uncertainty exists, there is a requirement to draw attention in the
audit report to the related disclosures in the financial statements or, if such disclosures
are not provided or inadequate, to modify the opinion expressed therein;
|
| ― |
Evaluates the overall presentation of the financial statements
and assesses whether
these statements represent the underlying transactions and events in a manner that
achieves fair presentation.
|
Report to the
Audit Committee
We submit to the Audit Committee a report which includes in particular a description
of the scope of the audit and the audit program implemented, as well as the results
of our audit. We also report any significant deficiencies in internal control regarding
the accounting and financial reporting procedures that we have identified.
Our report to the Audit Committee includes the risks of material misstatement that,
in our professional judgment, were of most significance in the audit of the financial
statements of the current period and which are therefore the key audit matters that
we are required to describe in this report.
We also provide the Audit Committee with the declaration provided for in Article
6
of Regulation (EU) No 537/2014, confirming our independence within the meaning of
the rules applicable in France as set out in particular in Articles L.822-10 to L.822-14
of the French Commercial Code (Code de commerce) and in the French Code of Ethics
for Statutory Auditors (Code de déontologie de la profession de commissaire aux comptes).
Where appropriate, we discuss with the Audit Committee the risks that may reasonably
be thought to bear on our independence, and the related safeguards.
Neuilly sur Seine and Paris, 01 April 2019
PricewaterhouseCoopers
Audit
The
Statutory Auditors
French
original signed by
Anik
Chaumartin
Laurent
Tavernier
ERNST
& YOUNG et Autres
Olivier
Durand
Matthieu
Prechoux
8. GENERAL INFORMATION
How to download
the PDF of CACIB registration document?
2018
1. Go TO WWW.CA-CIB.COM
2. Go TO "ABOUT US" > FINANCIAL INFORMATION
3. CLICK ON "ACTIVITY REPORT" IN THE MIDDLE OF THE PAGE
4. CLICK ON THE REGISTRATION DOCUMENT COVER TO ACCESS THE PDF FILE
1. INFORMATION
ABOUT THE COMPANY
1.1 CORPORATE'S
NAME
Crédit Agricole Corporate and Investment Bank.
1.2 REGISTERED
OFFICE
12, place des États-Unis
CS 70052
92547 Montrouge Cedex
France
Tel.: +33 (0)1 41 89 00 00
Site internet: www.ca-cib.fr
1.3 FINANCIAL
YEAR
The company's financial year begins on 1 January and ends on 31 December each year.
1.4 DATE OF INCORPORATION
AND DURATION
The Company was incorporated on 23 November 1973. Its term ends on 25 November
2064,
unless the term is extended or the Company is wound up before that date.
1.5 LEGAL STATUS
Crédit Agricole Corporate and Investment Bank is a French société anonyme (joint
stock
Corporation) with a Board of Directors governed by ordinary company law, in particular
the Second Book of the French Commercial Code (Code de commerce).
Crédit Agricole Corporate and Investment Bank is a credit institution approved
in
France and authorised to conduct all banking operations and provide all investment
and related services referred to in the French Monetary and Financial Code (Code Monétaire
et Financier). In this respect, Crédit Agricole CIB is subject to oversight by responsible
supervisory authorities, particularly the French Prudential and Resolution Supervisory
Authority (ACPR). In its capacity as a credit institution authorised to provide investment
services, the Company is subject to the French Monetary and Financial Code, particularly
the provisions relating to the activity and control of credit institutions and investment
service providers.
1.6 ACUISITIONS
MADE BY CRÉDIT AGRICOLE CIB OVER THE PAST THREE YEARS
♦ Completed acquisitions
| Date |
Investments |
Financing |
| 19/10/2016 |
CFM Indosuez Wealth Management signed a cross-referral
agreement with HSBC Private
Bank to service HSBC customers in Monaco.
|
The acquisition was financed by own funds generated and
retained during the year. |
| 13/07/2017 |
Indosuez Wealth Management signs agreement for acquisition
of Crédit Industriel et
Commercial's private banking operations in Singapore and Hong Kong.
|
The acquisition was financed by own funds generated and
retained during the year. |
| 03/05/2018 |
Indosuez Wealth Management finalised the acquisition
of 94.1% of the share of Banca
Leonardo.
|
The acquisition was financed by own funds generated and
retained during the year. |
N.B.: we cannot disclose certain information about investment amounts without violating
confidentiality agreements or revealing information to our rivals that could be detrimental
to us.
♦ Acquisitions
in progress and upcoming
Crédit Agricole CIB has no significant investments to come and identified at this
stage, and any significant investments in progress.
1.7 NEW PRODUCTS
AND SERVICES
Crédit Agricole CIB has developed Quantitative Investment Strategies relying on
external
index administrators to define the systematic investment rules that govern the custom
indexes created. Strategy revolves around the creation of new indices and products
from Fixed Income to Equity with targeted local markets in Europe and Asia - Pacific.
In this context, Crédit Agricole CIB collaborated with these index administrators
during 2018, including focusing on the development of pool of indices for its green
and sustainable offering. As an example, Crédit Agricole CIB has worked with MSCI
to launch the MSCI Europe Select Green 50 5% Decrement Index which provides exposure
to the performance of the top 50 companies in Europe that offer products and services
contributing to an environmentally sustainable economy through efficient use of limited
global natural resources.
1.8 MATERIAL CONTRACTS
Crédit Agricole CIB has not entered into any material contracts conferring a significant
obligation or commitment on the Crédit Agricole CIB Group, apart from those concluded
within the normal conduct of its business.
1.9 RECENT TRENDS
Crédit Agricole CIB's perspectives have not suffered any significant deterioration
since 31 December 2018, the date of its latest audited and published financial statements
(see "Recent trends and outlook" section, pages 149 and 150).
1.10 SIGNIFICANT
CHANGES
Since 31 December 2018, there has been no significant change in the Group's financial
or commercial situation has not occurred.
1.11 AFFILIATION
Pursuant the Article R. 512-18 of the French Monetary and Financial Code (Code
Monétaire
et Financier), Crédit Agricole CIB has been affiliated with the Crédit Agricole network
in 2011. As mentioned by the Article R. 512-18 of the French Monetary and Financial
Code (Code Monétaire et Financier), the central organs of the credit institutions
"have to deal with the cohesion of their network and to take care of their affi liated
institutions' smooth functioning. To that purpose, they take all the necessary measures,
notably to guarantee the liquidity and the solvability of each of these institutions
as well as the whole network".
1.12 PUBLICLY
AVAILABLE DOCUMENTS
The present document is available on: http://www.ca-cib.com/group-overview/financial-information.htm
and on: www.amf-france.org
The entire regulated information, as defined by the AMF (under Title II of Book
II
of the AMF General Regulation), is available on the website of the Company: http://www.ca-cib.com/group-overview/financial-information.htm
>Regulated Information.
A copy of the Articles of association may be consulted at the registered office.
2. STATUTORY AUDITORS'
REPORT ON RELATED PARTY AGREEMENTS AND COMMITMENTS ANNUAL GENERAL
MEETING HELD TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
To the General Meeting of Shareholders of Crédit Agricole Corporate and Investment
Bank,
In our capacity as statutory auditors of your Company, we hereby present to you
our
report on related party agreements and commitments. We are required to inform you,
on the basis on the information provided to us, of the terms and conditions of those
agreements and commitments indicated to us, or that we may have identified in the
performance of our engagement, as well as the reasons justifying why they benefit
the Company. We are not required to give our opinion as to whether they are beneficial
or appropriate or to ascertain the existence of other agreements [and commitments].
It is your responsibility, in accordance with Article R. 225-31 of the French Commercial
Code (Code de commerce), to assess the relevance of these agreements and commitments
prior to their approval.
We are also required, where applicable, to inform you in accordance with Article
R.
225-31 of the French Commercial Code (Code de commerce) of the continuation of the
implementation, during the year ended 31 December 2018, of the agreements and commitments
previously approved by the Annual General Meeting.
We performed those procedures which we deemed necessary in compliance with professional
guidance issued by the French Institute of Statutory Auditors (Compagnie nationale
des commissaires aux comptes) relating to this type of engagement. These procedures
consisted in verifying the consistency of the information provided to us with the
relevant source documents.
AGREEMENTS AND
COMMITMENTS SUBMITTED FOR APPROVAL TO THE ANNUAL GENERAL MEETING
Agreements and
undertakings authorised during the year under review
In accordance with Article L. 225-40 of the French Commercial Code (Code de commerce),
we have been notified of the following related party agreements and commitments which
received prior authorization from your Board of Directors.
1. WITH CRÉDIT
AGRICOLE S.A., CRÉDIT AGRICOLE TECHNOLOGIES ET SERVICES, CRÉDIT AGRICOLE
ASSURANCES SOLUTIONS, CA CONSUMER FINANCE, CRÉDIT AGRICOLE GROUP SOLUTIONS, CRÉDIT
AGRICOLE PAYMENT SOLUTIONS, CRÉDIT LYONNAIS AND FEDERATION NATIONALE DU CRÉDIT AGRICOLE
♦ A) Organization
and merger of IT infrastructure and production activities within
a new entity
PERSONS CONCERNED
Mr Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A and Chairman
of
the Board of Directors of Crédit Agricole CIB, and Ms Nicole Gourmelon, Ms Françoise
Gri, Ms Catherine Pourre, Mr Jacques Boyer, Mr Olivier Gavalda, Mr Luc Jeanneau and
Mr François Thibault, Chairmen and/or Directors of the companies concerned.
NATURE AND PURPOSE
At its meeting on 4 May 2018, your Company's Board of Directors first authorized
the
implementation of the project relating to the transfer of some of the Crédit Agricole
Group's IT infrastructure and production activities to a new entity, Crédit Agricole
- Group Infrastructure Platform (CA-GIP), consisting of the creation of the latter
by the signing of a Memorandum of Understanding, the articles of incorporation of
Crédit Agricole - Group Infrastructure Platform, and a Shareholders' Agreement governing
the relationships within this new entity. Noting the existence of common corporate
officers and directors, your Board of Directors authorized, under the conditions of
Article L.225-38 of the French Commerial Code (Code de commerce), the signing of the
Memorandum of Understanding whose purpose is to organize, between the various entities
of the Crédit Agricole Group, the merging of certain IT infrastructure and production
activities within the new entity.
To that end, the Memorandum of Understanding provides for all the steps and conditions
necessary for the performance and successful completion of this operation, namely:
| ― |
the creation of the new entity Crédit Agricole - Group Infrastructure
Platform and
its principles of governance;
|
| ― |
the principles of the valuation and structuring of the various
transfer operations
to be performed;
|
| ― |
the invoicing rules that Crédit Agricole - Group Infrastructure
Platform will apply
to its clients.
|
CONDITIONS
A framework study carried out during the second half of 2016 confirmed the strategic
and economic challenges of the project and laid down its fundamentals. A detailed
study, carried out from March to September 2017, made it possible to define the conditions
of the operation. Following this study, the parties to the Memorandum of Understanding
agreed to create a single Group IT infrastructure and production division. When it
is formed, within Crédit Agricole - Group Infrastructure Platform, the new entity
to be created in the form of an SAS (simplified joint-stock company), it will group
together SILCA and the IT production activities of Crédit Agricole Technologies et
Services, Crédit Agricole Corporate and Inventment Bank in France, Crédit Agricole
Payment Services (contributed to SILCA as of 1 January 2018) and Crédit Agricole Assurances
Solutions (the "Pôle Unique Infrastructure et Production du Groupe"). Subsequently,
its role will be to host the IT production activities of the other Group entities.
The Memorandum of Understanding was signed on 8 June 2018.
REASONS JUSTIFYING
WHY THE COMPANY BENEFITS FROM THIS AGREEMENT
Your Board of Directors gave the following reasons:
Within the framework of its medium-term plan entitled "Ambition Stratégique 2020",
the Crédit Agricole Group decided to implement a new client project in order to strengthen
its growth dynamics and invest in the sustainable improvement of its industrial efficiency.
These priorities and the unprecedented technological changes that accompany the digital
revolution will lead all the Group's entities to invest significantly over the long
term in new standard IT practices.
The merging of some of the Group's IT infrastructure and production activities
is
the most efficient way of carrying out these transformations under the best possible
conditions of effectiveness, security, innovation and improvement of the economic
performance. The project will also provide staff with the opportunity to increase
their employability by evolving towards new value-added activities brought about by
technological changes. The Memorandum of Understanding thus provides for all the steps
and conditions necessary for the performance and successful completion of this strategic
project.
♦ B) Shareholders'
Agreement on the rules of governance of CA-GIP
PERSONS CONCERNED
Mr Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A and Chairman
of
the Board of Directors of Crédit Agricole CIB, Ms Nicole Gourmelon, Ms Françoise Gri,
Ms Catherine Pourre, Mr Jacques Boyer, Mr Olivier Gavalda, Mr Luc Jeanneau and Mr
François Thibault, Chairmen and/or Directors of the companies concerned.
NATURE AND PURPOSE
At its meeting on 4 May 2018, your Company's Board of Directors authorized the
signing
of a Shareholders' Agreement pursuant to the abovementioned Memorandum of Understanding.
Some of the parties agreed to set up a new company, Crédit Agricole - Group Infrastructure
Platform, which leads the project concerning the merging of some of the Crédit Agricole
group's IT infrastructure and production activities.
This company was formed in order to acquire, as of 1 January 2019, SILCA and the
IT
production activities of Crédit Agricole Technologies et Services, Crédit Agricole
Corporate and Investment Bank in France and Crédit Agricole Assurances Solutions.
Its role is to host the IT production activities of other Crédit Agricole group entities.
Together, the shareholder parties hold 100% of the share capital and voting rights
of the company.
Within this context, the parties wished, through the Shareholders' Agreement:
| ― |
to supplement the rules of governance of the company provided
for in the articles
of incorporation;
|
| ― |
to organize their relationships as shareholders;
|
| ― |
to determine the conditions that they intend to comply with in
the event of the transfer
of all or part of their stake in the company's capital. The Shareholders' Agreement
relating to Crédit Agricole - Group Infrastructure Platform notably lays down the
following rules of governance specific to Crédit Agricole - Group Infrastructure Platform:
a board of directors composed 50/50 of Regional banks and their subsidiaries or IT
production entities and the Crédit Agricole S.A. group, with a Chairman of the company
who is also chairman of the board of directors, appointed upon the proposal of the
Regional banks and a Chief Executive Officer appointed upon the proposal of the Crédit
Agricole S.A. group.
|
Noting, in addition to the presence of common corporate officers and directors,
that
the rules of governance described above do not reflect the division of the capital
between the Regional banks and their subsidiaries (36%) and the Crédit Agricole S.A.
group (64%), Crédit Agricole S.A. considered that this Shareholders' Agreement constituted
a regulated agreement within the meaning of the provisions of the French Commercial
Code (Code de commerce).
CONDITIONS
The Shareholders' Agreement specifies the rules of governance of Crédit Agricole
-
Group Infrastructure Platform, as concerns both the executive and the supervisory
functions of the management body, as well as those of the subsidiary to be formed
in accordance with the Memorandum of Understanding. In particular, it organizes the
rules relating to the financing of the company and the transfer of securities, as
well as any conditions of the exit of a shareholder and the conditions under which
the company's services will be provided.
The Shareholders' Agreement was signed on 8 June 2018.
REASONS JUSTIFYING
WHY THE COMPANY BENEFITS FROM THIS AGREEMENT
Your Board of Directors gave the following reasons:
As this concerns a structure whose role is solely internal to the Crédit Agricole
Group, the Shareholders' Agreement allows the shareholders of Crédit Agricole - Group
Infrastructure Platform to determine:
| ― |
the special rules applying between them for the organization
of their relationships
within the company (governance, decision-making, etc.), beyond the sole criterion
of the breakdown of capital;
|
| ― |
the way in which CA-GIP will be managed and financed,
|
| ― |
the conditions to comply with in the event of the sale of all
or part of their stake
in CA-GIP.
|
The Shareholders' Agreement also enables the creation of a group of shareholders
belonging
to the Crédit Agricole S.A. group, thus ensuring a unified approach to decision-making
within CA-GIP whether by the Board of Directors or the General Meeting of Shareholders.
2. WITH CRÉDIT
AGRICOLE S.A., CRÉDIT AGRICOLE ASSURANCES SOLUTIONS, CRÉDIT LYONNAIS,
CA CONSUMER FINANCE, CRÉDIT AGRICOLE GROUP SOLUTIONS, CRÉDIT AGRICOLE - GROUP INFRASTRUCTURE
PLATFORM AND SILCA
♦ SILCA guarantee
agreement on the representations and warranties granted by the shareholders
of SILCA for the benefit of CA-GIP, as well as the respective rights and obligations
of the parties in the event of breach or inaccuracy of one or more of said representations
PERSONS CONCERNED
Mr Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A and Chairman
of
the Board of Directors of Crédit Agricole CIB, Ms Nicole Gourmelon, Ms Françoise Gri,
Ms Catherine Pourre, Mr Jacques Boyer, Mr Olivier Gavalda and Mr François Thibault,
Chairmen and/or Directors of the companies concerned.
NATURE AND PURPOSE
At its meeting of 31 October 2018, your Company's Board of Directors authorized
the
signing of a guarantee agreement, the terms and conditions of which are described
below.
At its meeting on 4 May 2018 during which it authorized the signing of the Memorandum
of Understanding, your Company's Board of Directors was informed that the signatories
would agree that the agreements for the contribution or divestment of business activities
would provide for clauses guaranteeing assets and liabilities relating to management
prior to the completion date and that, in the case of SILCA, a special mechanism must
be studied insofar as this entity will be the subject of a merger before the expiry
of the liability guarantees.
The purpose of the guarantee agreement authorized by your Board of Directors is
to
set out the representations and warranties granted by the guarantors for the benefit
of Crédit Agricole - Group Infrastructure Platform in respect of the merger of SILCA
with Crédit Agricole - Group Infrastructure Platform, as well as the respective rights
and obligations of the parties in the event of breach or inaccuracy of one or more
of said representations.
CONDITIONS
The main conditions of the SILCA Guarantee are as follows:
For a period of thirty-six months as from 1 January 2019, the Guarantors undertake,
each in proportion to its share in the capital of SILCA as at the date of completion
of the merger, to indemnify CA-GIP:
| ― |
for any increase in liabilities or any reduction in assets caused
by or arising out
of a fact or an event prior to 1 January 2019;
|
| ― |
any damage suffered by CA-GIP as a result of the inaccuracy or
insincerity of a representation
relating to the assets transferred within the framework of the merger;
|
| ― |
any damage suffered by CA-GIP following a third-party claim relating
to acts prior
to 1 January 2019 attributable to SILCA.
|
The period of thirty-six months is replaced by the statute of limitations concerning
any damage suffered by Crédit Agricole - Group Infrastructure Platform due to the
inaccuracy or insincerity of a representation relating to SILCA. The indemnity undertaking
for damage suffered by Crédit Agricole - Group Infrastructure Platform relating to
tax matters will expire at the end of a period of ten working days as from the expiry
of the statute of limitations. A threshold of EUR 10,000 per claim is fixed for the
taking into account of a claim. The parties have not set any aggregate limit.
The guarantee agreement was signed on 21 November 2018.
♦ Reasons justifying
why the Company benefits from this agreement
YOUR BOARD OF
DIRECTORS GAVE THE FOLLOWING REASONS:
As part of the project to merge the IT production activities of the Crédit Agricole
Group already approved by the Board of Directors on 4 May 2018, the Memorandum of
Understanding signed on 8 June 2018 between several group subsidiaries states that
the Parties will include asset and liability guarantee clauses in the business divestiture
or contribution agreements (Article 11.3.2).
In accordance with the Memorandum of Understanding, the parties agreed on the signing
of the SILCA Guarantee with the shareholders of SILCA as the latter is to cease to
exist after the completion of the merger. The signing of the SILCA Guarantee will
result in the costs of any damage arising from the prior management of the SILCA business
being borne by the entities that are shareholders of SILCA, according to the terms
and conditions under the SILCA Guarantee. Indeed, as not all of the shareholders of
CA-GIP are shareholders of SILCA, it was deemed inappropriate for such damage to be
shared and its cost to be borne by all the shareholders of CA-GIP.
3. COMMITMENTS
MADE TO THE CHIEF EXECUTIVE OFFICER
♦ Commitments
made to Mr Jacques Ripoll, Chief Executive Officer
NATURE AND PURPOSE
Mr Jacques Ripoll was appointed Chief Executive Officer of your Company during
the
Board of Directors meeting held on 31 October 2018. He is bound by an employment contract
with Crédit Agricole S.A. and is not entitled to any compensation by your Company
in respect of his term of office as Chief Executive Officer.
Mr Jacques Ripoll's employment contract with Crédit Agricole S.A. is to be maintained
since Mr Ripoll performs other duties within the Crédit Agricole Group in his capacity
as Deputy Chief Executive Officer in charge of the Large Clients Division. In this
capacity, he supervises other activities such as wealth management and services to
institutional investors and corporates.
The costs of all the benefits and rights attached to the employment contract, including
a supplementary pension scheme and non-competition clause, are borne exclusively by
Crédit Agricole S.A. Under this employment contract, Mr Ripoll is a member of the
supplementary pension scheme applicable to him and is entitled to the same benefits
and additional compensation as Crédit Agricole S.A. Executive Managers, including
the collective and mandatory pension, healthcare and life insurance plans. As regards
the pension scheme, the fixed and variable remuneration allocated under the employment
contract with Crédit Agricole S.A. will be taken into account in the annual calculation
base in accordance with the current terms of the pension scheme concerned.
Under his employment contract with Crédit Agricole S.A., Mr Ripoll also benefits
from:
| ― |
the supplementary pension scheme for Crédit Agricole Group Executive
Managers
|
| ― |
a non-competition clause.
|
CONDITIONS
In application of paragraph 1 of Article L.225-42-1 of the French Commercial Code,
the Board of Directors of your Company has, for all purposes, authorized regulated
commitments made by Crédit Agricole S.A. for the benefit of Mr Ripoll pursuant to
his employment contract. These commitments relate to the following elements:
| ― |
defined-benefit pension commitments attached to Mr Ripoll's employment
contract with
Crédit Agricole S.A.
|
| ― |
The annual vesting of the rights will be subject to compliance
with Crédit Agricole
CIB performance conditions. The annual vesting of Mr Ripoll's rights will therefore
be subject to the achievement by Crédit Agricole CIB of at least 50% of the targeted
Net Profit Group Share of Corporate and Investment Banking (CIB) activities restated
for:
| ― |
the positive or negative impacts of the Mark to Market valuation
of CPM loan hedges
and Debt Valuation Adjustment (DVA),
|
| ― |
the impacts of the first-time application of the new CVA, DVA
and FVA rules,
|
| ― |
goodwill impairment.
|
|
It is specified that this condition will be deemed satisfied if your Company does
not achieve this objective because of an adverse market environment affecting Crédit
Agricole CIB's competitors in a similar way.
| ― |
the non-competition clause included in his employment contract.
|
| ― |
Mr Ripoll undertakes, after notification of the termination of
his employment contract,
whatever the cause, not to exercise, directly or indirectly, an activity for a competing
company, for a maximum period of 12 months from the date of termination of the employment
contract. In return for the non-compete obligation, special compensation equal to
the fixed gross amount of 800,000 euros would be paid by Crédit Agricole S.A. in 12
monthly installments in accordance with the terms and conditions set out in the employment
contract.
|
All of the commitments are part of the common supplementary pension scheme for
Executive
Managers of the Crédit Agricole S.A. Group: The supplementary pension plans are a
combination of a defined-contribution plan and an additional defined-benefit plan.
The rights of the additional plan are determined after deduction of the rights paid
under the defined-contribution plan. Contributions to the defined-contribution plan
equal 8% of the gross monthly salary capped at eight times the Social Security cap.
The additional rights of the defined-benefit plan are equal, subject to presence in
the Company at the end of the plan, for each year of service, and according to the
fixed end-of-career salary, referred to as the reference compensation, to 1.20% of
the reference compensation plus the variable compensation (capped at 60% of the reference
compensation). On the termination date, the total pension resulting from these plans
and the compulsory pension schemes will be capped at ten times the annual Social Security
cap at that date.
COMMITMENTS MADE
TO THE DEPUTY CHIEF EXECUTIVE OFFICER
♦ Commitments
made to Mr François Marion, Chief Executive Officer
NATURE AND PURPOSE
On 9 May 2016, when Mr François Marion was appointed Deputy Chief Executive Officer,
with effect as of 18 May 2016, and again on 2 November 2016, upon the first renewal
of his term of office, and on 31 October 2018, on the occasion of the second renewal
of his term of office, the Board of Directors authorized various regulated commitments
for the benefit of Mr Marion.
The Board of Directors considered that in view of Mr Marion's experience in the
Company
and the Crédit Agricole Group, the maintaining of his employment contract (while suspending
it) and of his length of service accrued under this contract would avoid the calling
into question of the rights that Mr Marion has gradually earned during his career
as an employee with Crédit Agricole CIB and the Crédit Agricole Group (more than 15
years of service).
CONDITIONS
These commitments relate to the following elements:
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Suspension of his employment contract with the Company during
the term of office and
reactivation of this employment contract at the end of the term of office with all
the rights attached to this employment contract being maintained, as well as the period
of the term of office being taken into account in respect of the employment contract
for the calculation of Mr Marion's rights that are dependent on a condition or level
of length of service,
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| ― |
Continuation of Mr Marion's affiliation with the Supplementary
Defined-Benefit Scheme
applicable to him under his corporate term of office. Mr Marion is entitled to the
same benefits and additional compensation as the Company's senior executives, including
the pension, healthcare and life insurance plans. With regard to the pension plan,
the fixed and variable compensation allocated in respect of the corporate office within
Crédit Agricole CIB will be taken into account in the annual calculation base according
to the current terms and conditions of the pension plan concerned, Mr Marion already
having at least fifteen years of service for the application of the supplementary
retirement rules and the calculation of the related rights.
|
As Mr Marion had already reached the maximum applicable replacement rate prior
to
his appointment as Deputy Chief Executive Officer, the term of office will not entail
any new conditional rights (additional replacement rate) as referred to in paragraphs
2, 7 and 8 of Article L.225-42-1 of the French Commercial Code. It is therefore not
necessary to subject the implementation of the supplementary pension regulations to
any performance condition and the aforementioned paragraphs of Article L.225-42-1
of the French Commercial Code shall not apply.
All the commitments are part of the common supplementary pension scheme:
At the time of payment, the amounts paid in respect of the basic and supplementary
compulsory pension benefits for the entire career within and outside the Company are
taken into account. The total amount of the pension payments received under the compulsory,
additional and supplementary group plans may not exceed 50% of the reference salary.
The rights arising from this differential-type plan are vested only when the beneficiary
ends his career with Crédit Agricole CIB and is expressed as a percentage of a base,
or reference salary, which is equal to the annual average of the last three fixed
annual remuneration amounts augmented by the average of the gross bonuses awarded
in the last thirty-six months, the average bonus being limited to half of the last
fixed salary.
Agreements and
undertakings not previously authorized
In accordance with Article L. 225-42 of the French Commercial Code (Code de commerce),
we inform you of the following agreement that was not previously authorized by your
Board of Directors.
It is our responsibility to explain to you the circumstances causing the failure
to
follow the authorization procedure.
GUARANTEE GRANTED
TO THE CORPORATE OFFICERS
NATURE AND PURPOSE
This agreement concerns all members of the Board of Directors. To enable your Company
to assume the costs resulting from proceedings against all corporate officers, including
directors, the Board of Directors, at its meeting of 20 December 2012, was asked to
authorize the conclusion of a guarantee in favour of directors, including the Chairman.
It was submitted to the shareholders for approval at the Ordinary General Meeting
of 30 April 2013 based on the Statutory Auditors' report on related party agreements,
in accordance with Article L. 225-42 of the French Commercial Code (Code de commerce),
the Board having recused itself insofar as all directors were concerned.
TERMS AND CONDITIONS
In view of the positions held by the directors within the Company, the Board was
asked,
at its meeting of 29 October 2015, to authorize the amendment of the guarantee in
favour of the directors in order to give it the same degree of clarity as that authorized
by the Board of Directors at its meeting of 30 July 2015 in favour of the members
of the Executive Management.
Mr Odet Triquet, Mr Olivier Gavalda and Mr Jacques Boyer, apointed as directors
by
the General Meeting of Shareholders on 4 May 2018, have been beneficiaries of this
guarantee since the beginning of their term of office.
Having noted that all directors were concerned and that they could therefore not
take
part in the vote, the Board of Directors submitted this agreement to the approval
of the Ordinary General Meeting, in accordance with Article L. 225-42 of the French
Commercial Code (Code de commerce).
REASONS JUSTIFYING
WHY THE COMPANY BENEFITS FROM THIS AGREEMENT
Your Board of Directors justified these agreements and commitments as follows:
The purpose of this guarantee is to cover any risk of liability in legal or administrative
proceedings against directors, notably in the United States, during the period set
under the statute of limitations applicable to the claims in question, plus three
months.
AGREEMENTS AND
COMMITMENTS ALREADY APPROVED BY THE SHAREHOLDER'S MEETING
In accordance with Article R. 225-30 of the French Commercial Code (Code de commerce),
we were informed that the execution of the following agreements and commitments, already
approved by the shareholders' meeting in prior years, was pursued during the past
year.
1. WITH CRÉDIT
AGRICOLE S.A., SHAREHOLDER OF YOUR COMPANY
♦ A) Subscription
for preferred shares or deeply subordinated notes
NATURE AND PURPOSE
Further to the merger of the Corporate and Investment Banking businesses of the
Crédit
Agricole and Credit Lyonnais groups, Credit Lyonnais made a partial asset transfer
to Crédit Agricole Indosuez (now known as Crédit Agricole Corporate and Investment
Bank).
In view of the above transaction, it was deemed necessary to increase your Company
shareholders' equity. Two issues of deeply subordinated notes in US dollars were performed
in 2004. Crédit Agricole S.A. bought US$1,730 million of these notes.
TERMS AND CONDITIONS
One of the issues for an amount of US$1,260 million was repaid early during the
2014
financial year. For the issue in the amount of US$470 million still outstanding during
the year under review, the total coupon due in respect of 2018 was US$17 million.
♦ B) Amendment
of the tax consolidation agreement
NATURE AND PURPOSE
In 1996, Crédit Agricole S.A. signed a tax consolidation agreement with your Company,
which was renewed on 22 December 2015 for the period 2015-2019. The purpose of the
agreement is to govern relations between Crédit Agricole S.A., on the one hand, and
your Company and itsconsolidated subsidiaries on the other, and in particular the
allocation of the income tax charge and arrangements for monetising the losses of
the Crédit Agricole CIB consolidated sub-group.
This agreement enables your Company to receive the tax saving made by Crédit Agricole
Group corresponding to all losses generated by the Crédit Agricole CIB consolidated
sub-group offset by Crédit Agricole S.A. as head of the tax group.
TERMS AND CONDITIONS
As the result of the Crédit Agricole CIB subgroup recorded at 31 December 2018
is
a profit, the application of the tax consolidation agreement does not generate any
tax savings on deficits and does not give rise to payment by Crédit Agricole S.A.
♦ C) Agreement relating to the payment of the Euribor fine
PERSONS CONCERNED
Mr Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A. and Chairman
of the Board of Directors of Crédit Agricole CIB, Mr François Thibault, Director of
Crédit Agricole S.A. and Crédit Agricole CIB, as well as, in the same capacity, Mr
François Veverka and Mr Jean-Louis Roveyaz until the end of their terms of office
as Directors on the Board of Directors of Crédit Agricole CIB on 4 May 2017.
NATURE AND PURPOSE
On 7 December 2016, the European Commission sentenced your Company and Crédit Agricole
S.A., considered to be jointly and severally liable, to a fine of €114,654 million
after an investigation carried out by the Commission concluding on the existence of
a cartel among seven banking institutions on interest-rate derivatives in euros by
agreeing on the determination of the reference rate Euribor.
As soon as the Commission's judgement was delivered, Crédit Agricole S.A. announced
that it would appeal against the decision before the General Court of the European
Union. The revocation motion was filed on 17 February 2017.
As the appeal did not stay the judgement, Crédit Agricole S.A. had to pay the full
amount of the fine due before 5 March 2017.
Within this context, it was provided that Crédit Agricole S.A. and your Company
should
enter into an agreement determining the conditions relating to the provisional payment
of the fine, so that the conditions of the breakdown between them of the final amount
of the fine that may have to be paid would be decided after all European judicial
remedies have been exhausted.
TERMS AND CONDITIONS
At its meeting held on 10 February 2017, the Board of Directors authorized the
draft
agreement between your Company and Crédit Agricole S.A. under the terms set out below:
| ― |
In the pending period prior to the obtaining of a court order
having the force of
res judicata being heard in a court of last instance, Crédit Agricole S.A. shall bear
and pay the amount of €114,654,000 in respect of the penalty on a provisional basis;
|
| ― |
the terms of the breakdown of the final amount of the potential
penalty will have
to be agreed mutually between your Company and Crédit Agricole S.A. at a later date,
once a decision having the authority of res judicata has been adopted.
|
The agreement was authorized in identical terms by the Board of Directors of Crédit
Agricole S.A. on 20 January 2017.
In accordance with the delegation granted by their respective Boards, this agreement
was signed on 27 February 2017 by your Company's CEO and Crédit Agricole S.A.'s Chief
Executive Officer. The penalty was paid within the statuory time limit, i.e., before
5 March 2017.
♦ D) Business
disposal agreement relating to the banking services department
PERSONS CONCERNED
Mr Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A. and Chairman
of the Board of Directors of Crédit Agricole CIB, Ms Françoise Gri, Ms Catherine Pourre
and Mr François Thibault, directors of both Crédit Agricole S.A. and Crédit Agricole
CIB, as well as, in the same capacity, Mr Jean-Pierre Paviet until the end of his
term of office on 4 May 2018.
NATURE AND PURPOSE
In line with the "Strategic Ambition 2020" Medium-Term Plan, under which Crédit
Agricole
S.A. aims to refocus on its core business activities, Crédit Agricole S.A. and your
Company agreed to transfer credit Agricole S.A.'s Banking Services Department to your
Company's Operations & Country COOs Department.
The operation took the form of a business disposal agreement including:
| ― |
ya settlement and correspondent banking activity (or "Correspondent
Banking") consisting
for the Banking Services Department in account management and the provision of services
related to this account management (particularly electronic transfers, cheque clearing
etc.) for Crédit Agricole and non-Crédit Agricole clients;
|
| ― |
an account management activity for the regional banks and some
of the other Crédit
Agricole Group credit institutions;
|
| ― |
a level 1 alerts treatment activity.
|
This transfer of activity excluded the management of certain accounts opened by
regional
banks with Crédit Agricole S.A. in its capacity as central body in accordance with
the applicable regulations.
TERMS AND CONDITIONS
At its meeting of 12 December 2017, your Board of Directors authorized the transfer
of ownership of the Banking Services Department as described above by means of a business
disposal agreement effective 1 January 2018. As of that date, your Company has operated
the business divested with the human and material resources transferred.
However, for operational reasons and, in particular, the migration of information
systems, your Company was not able to open accounts for Banking Services customers
on the transfer date. Consequently, accounts opened by customers will be administered
by Crédit Agricole S.A. during a transition period and will be opened by your Company
during and before the end of the transition period according to a schedule based on
progress made in the work to be done by your Company, which is expected to be completed
no later than 31 December 2020. During this transition period, Crédit Agricole S.A.
will transfer back to your Company any income generated on the transactions of the
transferred business that it receives from Banking Services customers. At the same
time, all charges, costs and liabilities incurred by Crédit Agricole S.A. in respect
of the transferred business will be borne by your Company.
The price of the business disposal was agreed at EUR 57,000.
As the business disposal agreement is not a routine business transaction for Crédit
Agricole S.A. or your Company and thus cannot be considered as a transaction in the
normal course of business at arm's length terms, it qualifies as a related-party agreement
governed by the provisions of Article L.225-38 of the French Commercial Code.
♦ E) Biling and
collection mandate within the scope of the transfer of Crédit Agricole
S.A.'s IT services management activities (MSI) to Crédit Agricole CIB
PERSONS CONCERNED
Mr Philippe Brassac, Chief Executive Officer of Crédit Agricole S.A. and Chairman
of the Board of Directors of Crédit Agricole CIB, Ms Françoise Gri, Ms Catherine Pourre
and Mr François Thibault, directors of Crédit Agricole CIB and Crédit Agricole S.A.,
as well as, in the same capacity, Mr Jean-Pierre Paviet until the end of his term
of office on 4 May 2018.
NATURE AND PURPOSE
At its meeting held on 12 December 2017, the Board of Directors of Crédit Agricole
S.A. authorized the transfer of Crédit Agricole S.A.'s information technology activities
(MSI) to Global IT (GIT) which performs the same assignments for the Crédit Agricole
CIB scope.
The transfer of the divested activity is effective as of 1 January 2018.
The transfer itself does not constitute a regulated agreement but, within the context
of this operation, your Company and Crédit Agricole S.A. set up a temporary billing
and collection mandate which falls within the scope of paragraph 2 of Article L.225-38
of the French Commercial Code regarding regulated agreements. In this respect, this
mandate was authorized by the Board of Directors of Crédit Agricole CIB at its meeting
on 12 December 2017.
TERMS AND CONDITIONS
During a six- to twelve-month transition period starting from the MSI transfer
date,
certain Crédit Agricole Group entities may benefit from MSI services, by means of
signed quotations. Billing and collection services will be carried out by Crédit Agricole
S.A. under a billing and collection mandate, which includes, in particular, Crédit
Agricole S.A.'s warranty to your Company concerning the collection, from the entities
benefiting from these services, of the amounts billed by Crédit Agricole S.A. in the
name of and on behalf of your Company.
At the end of this transitional period, your Company may decide, if appropriate,
to
perform the services for these Group entities, through another Crédit Agricole Group
entity, depending on the result of the services performed during the transitional
period, regulatory changes and any other potential reorganization of activities carried
out within the Crédit Agricole Group.
2. WITH CRÉDIT
LYONNAIS
♦ Agreement for
the compensation of Credit Lyonnais
NATURE AND PURPOSE
The Corporate and Investment Banking (CIB) business of Credit Lyonnais was transferred
to your Company on 30 April 2004 with retroactive effect from 1 January 2004 for accounting
and tax purposes, except for short-, medium- or long-term outstanding commercial loans
for which your Company preferred to defer the effective date until 31 December 2004
at the latest, given the time needed to complete their transfer. To comply with the
principle of retroactive effect from 1 January 2004, your Company undertook to indemnify
Credit Lyonnais for the counter- party risks relating to those loans from 1 January
2004.
TERMS AND CONDITIONS
The amount of the guarantee was €1.85 million as of 31 December 2018. The amount
of
compensation due in respect of 2018 was €4,445.21.
3. WITH CRÉDIT
AGRICOLE INDOSUEZ PRIVATE BANKING (RECENTLY RENAMED CRÉDIT AGRICOLE
INDOSUEZ WEALTH (FRANCE)), A SUBSIDIARY OF YOUR COMPANY
♦ Agreement for
the subleasing of premises
NATURE AND PURPOSE
As part of the regrouping of employees of Crédit Agricole Indosuez Wealth France
(formerly
known as Crédit Agricole Indosuez Private Banking) in the building located at 17,
rue du Docteur Lancereaux in the 8 th arrondissement of Paris, of which
your Company is a tenant under a firm lease expiring
in 2040, a subleasing agreement with Crédit Agricole Indosuez Private Banking was
authorized by your Board of Directors at its meeting of 5 November 2013.
TERMS AND CONDITIONS
This agreement took effect on 1 July 2014 and includes a firm commitment by Crédit
Agricole Indosuez Private Banking for a lease term of 12 years and an annual rent
identical to that of the main lease, initially set at €3.6 million.
In exchange for the firm lease commitment, your Company granted Crédit Agricole
Indosuez
Wealth (France) a 36-month rent-free period ending on 30 June 2017 and bore the cost
of the refurbishment work for a maximum amount of €5.22 million excluding taxes and
including fees. In 2018, your Company did not bear the cose of any additional work.
Through the effect of the indexation clause, the annual rent invoiced to your Company
for the year 2018 amounts €3,62 million excluding taxes. As provided for by the subleasing
agreement, Crédit Agricole Indosuez Wealth (France) has paid the full rent since 1
July 2017.
4. WITH THE CORPORATE
OFFICERS
NATURE AND PURPOSE
This agreement concerns the Chief Executive Officer. To enable your Company to
assume
the costs resulting from proceedings against all corporate officers, including the
Chief Executive Officer, the Board of Directors, at its meeting of 20 December 2012,
was asked to authorize the conclusion of a guarantee in favour of the Chief Executive
Officer.
TERMS AND CONDITIONS
In view of the duties performed by the Chief Executive Officer within the Company,
the Board was asked to authorize the amendment of the guarantee in favour of the Chief
Executive Officer relating to the corresponding scope of the duties peformed by the
beneficiary and to the improved clarity of the letter.
In financial year 2018, Mr Jacques Ripoll, apointed as Chief Executive Officer,
with
effect as of 1 November 2018, has benefited from this guarantee since the beginning
of his term of office.
Mr François Marion, whose term of office as Deputy Chief Executive Officer was
renewed
by the General Meeting of Shareholders on 31 October 2018, continues to benefit from
this guarantee.
Neuilly-Sur-Seine and Paris-La Défense, 1st April 2019
PricewaterhouseCoopers
Audit
The
Statutory Auditors
French
original signed by
Anik
Chaumartin Prechoux
Laurent
Tavernier
ERNST
& YOUNG and other
Olivier
Durand
Matthieu
3. PERSON RESPONSIBLE
FOR THE REGISTRATION DOCUMENT AND FOR AUDITING THE ACCOUNTS
RESPONSIBILITY STATEMENT
I hereby certify that, to my knowledge and after all due diligence, the information
contained in this Registration Document is true and accurate and contains no omissions
likely to affect the import thereof.
I certify that, to my knowledge, the financial statements were prepared in accordance
with applicable accounting principles and give a true and fair view of the assets,
financial position and results of the company and all consolidated companies, and
that the management report, of which the content is described in a cross-reference
table in Chapter 8, gives a true and fair view of the business activities, results
and financial position of the company and all consolidated companies, along with a
description of the main risks and uncertainties they face.
I have obtained a letter from the statutory auditors, PricewaterhouseCoopers Audit
et Ernst & Young et Autres, upon completion of their work in which they state
that
they have verified the information relating to the financial situation and financial
statements provided in this document and read the document as a whole.
Montrouge, 04 April 2019
The Chief Executive Officer of Crédit Agricole CIB Jacques Ripoll
4. STATUTORY AUDITORS
4.1 PRIMARY AND
ALTERNATE STATUTORY AUDITORS
| Primary statutory auditors |
|
| Ernst & Young et Autres Member of the Ernst &
Young network |
PricewaterhouseCoopers Audit Member of the PricewaterhouseCoopers
network |
| Member of the Versailles regional association of Statutory
auditors Company represented
by: Olivier Durand et Matthieu Préchoux
|
Member of the Versailles regional association of Statutory
auditors Company represented
by: Anik Chaumartin and Laurent Tavernier
|
| Head office: 1-2, place des Saisons 92400 Courbevoie
- PARIS-La Défense - France |
HEAD OFFICE: 63, RUE DE VILLIERS 92200 NEUILLY-SUR-SEINE |
| Length of statutory auditors' mandates |
|
| Ernst & Young et Autres was renewed Statutory Auditor
for six financial periods by
the shareholders' meeting of 4 May 2018.
|
PricewaterhouseCoopers Audit was renewed Statutory Auditor
for six financial periods
by the shareholders' meeting of 4 May 2018.
|
| Length of alternate auditors' mandates |
|
| The mandate of Picarle and Associés as alternate Statutory
Auditor of Ernst & Young
and Autres was not renewed by the General Meeting of Shareholders held on May 4, 2018,
in accordance with the provisions of Article L 823-1 of the French Commercial Code
and Article 18 of the articles of the society.
|
The mandate of Mr. Etienne Boris as alternate Statutory
Auditor of PricewaterhouseCoopers
Audit was not renewed by the General Meeting of Shareholders held on May 4, 2018,
in accordance with the provisions of Article L. 823-1 of the French Commercial Code
and Article 18 of the articles of the society.
|
5. CROSS-REFERENCE
TABLE
The following table indicates the page references corresponding to the main information
headings required by EC Regulation 809/2004 (annex I), enacting the terms of the "Prospectus"
directive.
| Headings required under annex I of
EC Regulation 809/2004 |
Page number |
| 1. Persons responsible |
473 |
| 2. Statutory Auditors |
474 |
| 3. Selected financial information |
|
| 3.1 Historical financial information |
13 to 14 |
| 3.2 Interim financial information |
N.A. |
| 4. Risk factors |
158 to 166, 167 to 206, 324 to 351, 381 to 383 |
| 5. Information about the issuer |
|
| 5.1 History and development of the issuer |
2 to 9, 11 to 16, 288 |
| 5.2 Investments |
296 to 297, 323, 404 to 407, 462 |
| 6. Business overview |
|
| 6.1 Main activities (1) |
18 to 20, 463 |
| 6.2 Main markets (1) |
14, 18 to 20 |
| 6.3 Exceptional factors |
N.A. |
| 6.4 Extent to which issuer is dependent on patents or
licenses, industrial, commercialor
financial contracts
|
204 |
| 6.5 Basis for any statements made by the issuer regarding
its competitive position |
16, 146 to 147 |
| 7. Organisation structure |
|
| 7.1 Brief description of the Group and the issuer's position
within the Group |
2, 7 |
| 7.2 List of significant subsidiaries |
404 to 407, 437 |
| 8. Property, plant and equipment |
|
| 8.1 Significant existing or planned property, plant &
equipment |
356, 379 to 380 |
| 8.2 Description of any environmental issues that may
affect the issuer's utilisation
of property, plant & equipment
|
60 to 62 |
| 9. Operating and financial Review |
|
| 9.1 Financial position (1) |
145 to 154, 293 to 297, 422 to 423 |
| 9.2 Operating income (1) |
145 to 154, 291 to 292, 423 |
| 10. Capital resources |
|
| 10.1 Information concerning the issuer's capital resources |
148, 209 to 231, 293 to 295, 383 to 384 |
| 10.2 Explanation of the sources and amount of the issuer's
cash flows |
296 to 297 |
| 10.3 Information on borrowing requirements and funding
structure |
200, 345 to 347 |
| 10.4 Information regarding any restrictions on the use
of capital resources that have
significantly affected, or could significantly affect, the issuer's operations
|
212 to 231, 379, 404, 410 |
| 10.5 Information regarding the anticipated sources of
funds needed to fulfil commitments |
152, 462 |
| 11. Research and development, patents and licences |
N.A. |
| 12. Information on trends |
9, 149 to 150, 411, 463 |
| 13. Profit forecasts or estimates |
N.A. |
| 14. Administrative, management and supervisory bodies
and Executive Management |
|
| 14.1 Information about the members of the Board and management
bodies |
83 to 102 |
| 14.2 Administrative, management and supervisory bodies
and Executive Management conflicts
of interests
|
103 to 104 |
| 15. Compensation and benefits |
|
| 15.1 Amount of compensation paid and benefits in kind |
81 to 82, 105 to 131, 387 to 389, 445 |
| 15.2 Total amounts set aside or accrued to provide pension,
retirement or similar
benefits
|
81 to 82, 105 to 131, 317 to 318, 381, 387 to 389, 431,
451 |
| 16. Functioning of administrative and governance bodies |
|
| 16.1 Term of office expiry date |
71, 83 to 102 |
| 16.2 Information on service contracts between members
of the administrative bodies
and the issuer or one of their subsidiaries
|
103 |
| 16.3 Information on the issuer's Audit and Compensation
Committees |
77 to 82 |
| 16.4 Compliance with the current corporate governance
regulations in the issuer's
country of origin
|
67 et 132 |
| 17. Employees |
|
| 17.1 Number of employees and breakdown by main type of
activity and by site |
14, 44 to 45, 387, 451 |
| 17.2 Investments in the issuer's share capital and stock
options |
318, 389 |
| 17.3 Arrangements for employee profit-sharing in the
issuer's capital |
52 |
| 18. Major shareholders |
|
| 18.1 Shareholders owning more than 5% of the share capital
or voting rights |
134 to 138 |
| 18.2 Existence of different voting rights for the issuer's
main shareholders |
134 to 136 |
| 18.3 Control over the issuer |
134 to 136 |
| 18.4 Description of any arrangements, known to the issuer,
the operation of which
may at a subsequent date result in a change in control of the issuer
|
134 to 136 |
| 19. Related-party transactions |
290, 378 to 379, 446 |
| 20. Financial information concerning the issuer's assets
and liabilities, financial
positions and profits and losses
|
|
| 20.1 Historical financial information (1) |
288 to 458 |
| 20.2 Pro forma financial information |
N.A. |
| 20.3 Financial statements |
288 to 458 |
| 20.4 Auditing of historical annual financial statements |
412 to 417, 453 to 458 |
| 20.5 Date of the latest financial information |
285 |
| 20.6 Interim financial information |
N.A. |
| 20.7 Dividend policy |
384 |
| 20.8 Legal and arbitration proceedings |
203 to 204, 462 |
| 20.9 Significant change in the issuer's financial or
commercial position |
463 |
| 21. Additional information |
|
| 21.1 Share capital |
134 to 136, 154, 288, 383 |
| 21.2 Memorandum and Articles of Association |
133 to 136, 288 |
| 22. Material contracts |
457 |
| 23. Third party information and statement by experts
and declarations of any interests |
N.A. |
| 24. Publicly available documents |
457 |
| 25. Information on equity investments |
289, 404 to 407, 437 |
N.A.: not applicable.
(1)
In accordance with Article 28 of EC Regulation 809/2004 and Article 212-11 of the
AMF's General Regulations, the following are incorporated by reference:• the annual
and consolidated financial statements for the year ended 31 December 2016 and the
corresponding Statutory Auditors' Reports, as well as the Group's management report,
appearing respectively on pages 357 to 387 and 262 to 353, on pages 388 to 389 and
354 to 355 and on pages 148 to 161 of the Crédit Agricole CIB Registration Document
2016 registered by the AMF on 22 March 2017 under number D.17-0208.• the annual and
consolidated financial statements for the year ended 31 December 2017 and the corresponding
Statutory Auditors' Reports, as well as the Group's management report, appearing respectively
on pages 363 to 392 and 271 to 353, on pages 393 to 397 and 354 to 358 and on pages
144 to 158 of the Crédit Agricole S.A. Registration Document 2017 registered by the
AMF on 23 March 2018.
The sections of the registration documents for 31 December 31 2016 and 31 December
2017 not referred to above are either not applicable to investors or are covered in
another part of this registration document.
REGULATED INFORMATION
WITHIN THE MEANING OF BY ARTICLE 221-1 OF THE AMF GENERAL REGULATION
CONTAINED IN THIS REGISTRATION DOCUMENT
This registration document, which is published in the form of an annual report,
includes
all components of the 2018 annual financial report referred to in paragraph I of Article
L. 451-1-2 of the Code Monétaire et Financier as well as in Article 222-3 of the AMF
General Regulation and the Ordinance 2017-1162 of 12/07/2017
|
|
Page number |
| 1 - Management report |
|
| Analysis of the financial position and earnings |
P. 145 to 154 |
| Risk analysis |
P. 171 to 180 et 158 to 206 |
| Performance indicators |
22 to 62 |
| Objectives and policy for hedging each major type of
transaction |
P. 314 to 315 |
| Economic, social and environmental information |
P. 22 to 62 |
| Information on accounts payables and receivables |
P. 152 |
| Share buybacks |
N/A |
| 2 - Corporate governance |
|
| Offices held by corporate officers |
P. 83 to 102, 131 |
| Agreements between a Executive manager or a major shareholder
and a subsidiary |
P. 290, 464 to 472 |
| Authorizations inforce concerning capital increases |
P. 136 |
| Methods for exercising General management |
N/A |
| Compensation policy |
P. 81 to 82, p.105 to 130, p. 387 to 389 |
| Information and composition on Committees, Board and
Executive management |
P. 65 to 82, 131 |
| Capital structure and articles of association |
P. 65 to 82, 134 to 136 |
| 3 - Financial statements |
|
| Parent company financial statements |
P. 422 to 452 |
| Statutory Auditors' Report on the parent company financial
statements |
P. 453 to 458 |
| Consolidated financial statements |
P. 288 to 411 |
| Statutory Auditors' Report on the consolidated financial
statements |
P. 412 to 417 |
| 4 - Responsability statement for the document |
P. 473 |
| Pursuant to Articles 212-13 and 221-1 of the AMF General
Regulation, this document
also contains the following regulatory information:
|
|
| Annual information report |
N/A |
| Description of share buyback programmes |
N/A |
| Fees paid to Statutory Auditors |
P. 355 |
| Chairman's report on corporate governance |
P. 67 to 136 |
9. GLOSSARY
Of the main technical terms /acronyms used
| A |
|
| ABS |
Asset-Backed Securities: securities which represent a
portfolio of financial assets
(excluding mortgage loans) for which the cash flows are based on those of the underlying
asset or asset portfolio.
|
| ACPR |
French Regulatory and Resolution Supervisory Authority:
French banking supervisory
body.
|
| AFEP-Medef |
Association Française des Entreprises Privées - Mouvement
des Entreprises de France
(Corporate governance code of reference for publicly traded companies).
|
| AFS |
Available For Sale. |
| ALM |
Asset and Liability Management: management of the financial
risks borne by an institution's
balance sheet (interest rate, currency, liquidity) and its refinancing policy in order
to protect the bank's asset value and/or its future profitability.
|
| AMA |
Advanced Measurement Approach. |
| AMF |
French Financial markets authority (Autorité des Marchés
Financiers, AMF). |
| AQR |
Asset Quality Review: includes regulatory risk evaluation,
review of the quality of
the actual assets and stress tests.
|
| Asset encumbrance |
Asset encumbrance corresponds to assets used to secure,
collateralize or back up a
credit facility for any type of transaction.
|
| AT1 |
Additional Tier 1: capital eligible under Basel 3 made
up of perpetual debt instruments
without any redemption incentive or obligation. It is subject to a loss absorption
mechanism where the CET1 ratio falls below a given threshold, fixed in their prospectus.
|
| B |
|
| Back-testing |
Method used to check the relevance of models and the
suitability of the VaR (Value
at Risk) in light of the risks actually borne.
|
| Basel I (agreements) |
Regulatory mechanism established in 1988 by the Basel
Committee, to ensure the solvency
and stability of the international banking system by setting a minimum, standardised,
international limit on the capital of banks. It introduced a minimum capital ratio
out of a bank's total risks of 8%.
|
| Basel II (agreements) |
Regulatory mechanism intended to better identify and
limit the risks of credit institutions.
It mainly concerns the credit risk, market risks and operational risks of banks.
|
| Basel III (agreements) |
Regulatory standards for banks, which replace the previous
Basel 2 agreements by increasing
the quality and quantity of the minimum capital that banks are required to hold against
the risk they take. It also introduces minimum standards for liquidity risk management
(quantitative ratios), defines measures attempting to curb the financial system's
pro-cyclicality (capital buffers varying according to the economic cycle) and tightens
the requirements on institutions considered as systemically important. In the European
Union, these regulatory standards were introduced under Directive 2013/36/EU (CRD
4 - Capital Requirements Directive) and Regulation (EU) No. 575/2013 (CRR - Capital
Requirements Regulation).
|
| BCBS |
Basel Committee on Banking Supervision: institution made
up of the governors of the
central banks of the G20 countries responsible for strenghtening the global financial
system and improving the effectiveness of regulatory checks and of cooperation between
banking regulators.
|
| Benchmark rate |
Interest rate set by a country's or currency zone's central
bank to regulate economic
activity. Principal tool in a central bank's arsenal for fulfilling its role of regulating
economic activity: inflation, stimulation of growth.
|
| Bookrunner |
Bookrunner (in investment transactions). |
| Bps |
Basis points. |
| C |
|
| Capital requirements |
Regulatory capital requirements, amounting to 8% of the
risk weighted assets (RWA). |
| CCF |
Credit Conversion Factor. |
| CCP |
Central Counterparty. |
| CDO |
Collateralised Debt Obligations, or debt securities linked
to a portfolio of assets
which can be bank loans (mortgages) or bonds issued by companies. The payment of interest
and the principal may be subordinated (creation of tranches).
|
| CDPC |
Credit Derivatives Products Companies (companies specialising
in selling protection
against credit default via credit derivatives).
|
| CDS |
Credit Default Swap: an insurance mechanism against credit
risk in the form of a bilateral
financial contract, in which a buyer of protection pays a periodic premium to a protection
seller, who promises to offset the losses on a reference asset (sovereign debt securities,
securities issued by financial institutions or companies) in the event of a credit
event (bankruptcy, default, moratorium, restructuring).
|
| CGU |
Cash generating unit: the smallest asset group identifiable
which generates cash inflows
which are largely independent of those generated by sundry assets or asset groups,
according to IAS 36. "According to IFRS, a company must define as many cash generating
units (CGUs) as possible which comprise it, these CGUs must be largely independent
in their transactions and the company must allocate its assets to each of these CGUs.
It is at the level of these CGUs that impairment tests are carried out occasionally,
if there is reason to believe that their value has fallen, or every year if they make
up the goodwill."
|
| CHSCT |
Health, Safety and Working Conditions Committee. |
| CLO |
Collateralised Loan Obligation: credit derivative relating
to a homogeneous portfolio
of business loans.
|
| CMBS |
Commercial Mortgage-Backed Securities: debt security
backed by a portfolio of assets
made up of corporate mortgage loans.
|
| CMS |
Constant Maturity Swap: contract which enables a short-term
interest rate to be exchanged
for a longer term interest rate.
|
| Collateral |
Transferable asset or guarantee given, used to pledge
repayment of a loan if the beneficiary
of the loan is unable to meet their payment obligations.
|
| Common Equity Tier 1 |
Common Equity Tier 1 capital of the institution which
mainly consist of the share
capital, the associated share premiums and reserves, less regulatory deductions.
|
| Common Equity Tier 1 ratio |
Ratio between Common Equity Tier 1 capital and assets
weighted by risk, according
to CRD4/CRR rules. Common Equity Tier 1 capital has a stricter definition than under
the former CRD3 rules (Basel II).
|
| Corporate governance |
Any mechanism that can be implemented to achieve transparency,
equality between shareholders
and a balance of powers between management and shareholders. These mechanisms encompass
the methods used to formulate and implement strategy, the operation of the Board of
Directors, the organisation framework between different governing bodies and the compensation
policy for Directors and executive managers.
|
| Cost/income ratio |
The cost/income ratio is calculated by dividing operating
expenses by revenues, indicating
the proportion of revenues needed to cover operating expenses.
|
| Cost of risk |
The cost of risk reflects allocations to and reversals
from provisions for credit
and counterparty risk (loans, securities, and off-balance sheet commitments), as well
as the corresponding losses not covered by provisions.
|
| Coverage |
Client follow-up. |
| Covered bond |
Collateralised bond: bond for which the redemption and
payment of interest are ensured
by income from a portfolio of high-quality assets which serves as a guarantee, often
a portfolio of mortgage loans. The transferor institution is often manager of the
payment of cash flows to the investors (obligations foncières in France, Pfandbriefe
in Germany). This product is usually issued by financial institutions.
|
| CPM |
Credit Portfolio Management. |
| CRBF |
Comité de Réglementation Bancaire et Financière. |
| CRD |
Capital Requirement Directive: European directive on
regulatory capital requirements. |
| CRD 3 |
European directive on capital requirements, incorporating
the provisions of Basel
II and 2.5, notably as regards market risk: improved consideration of default risk
and rating migration risk in the trading book (tranched and non-tranched assets) and
reduction of the procyclical nature of the value at risk.
|
| CRD 4/CRR (Capital Requirement Regulation) |
Directive 2013/36/EU (CRD 4) and (EU) Regulation No 575/2013
(CRR) constitute the
corpus of the texts transposing Basel III in Europe. They define European regulations
on solvency ratios, major risks, leverage and liquidity and are completed by the technical
standards of the European Banking Authority (EBA).
|
| Credit and counterparty risk |
Risk of losses arising from inability by the Group's
clients, issuers or other counterparties
to meet their financial commitments. Credit and counterparty risk includes the counterparty
risk relating to market transactions and securitisation operations.
|
| Credit Rating |
Measurement of credit quality in the form of an opinion
issued by a rating agency
(Standard & Poor's, Moody's, Fitch Ratings, etc.). The rating may apply to a specific
issuer (business, government, public-sector authority) and/or specific issues (bonds,
securitised notes, secured bonds, etc.). The credit rating may influence an issuer's
borrowing terms (interest rate it pays, its access to funding) and its market image
(see Rating agency).
|
| Credit spread |
Actuarial margin (difference between a bond's yield to
maturity and that on a risk-free
borrowing with an identical maturity).
|
| CRM |
Comprehensive Risk Management: capital charge in addition
to the IRC (Incremental
Risk Charge) for the correlation portfolio of lending operations taking into account
specific price risks (spread, correlation, recovery, etc.). CRM is a value at risk
of 99.9% i.e. the highest risk obtained after eliminating 0.1% of the most unfavourable
occurrences.
|
| CRR |
Capital Requirement Regulation (European regulation). |
| CSR |
Corporate social (and environmental) responsibility. |
| CVA |
The Credit Valuation Adjustment is the expectation of
a loss linked to counterparty
default and aims to take account of the fact that it may not be possible to recover
the full market value of the transactions. The method for determining the CVA primarily
relies on market parameters in line with the practices of market operators.
|
| CVaR |
Credit Value at Risk: maximum loss likely after elimination
of 1% of the most unfavourable
occurrences, used to set limits for each individual counterparty.
|
| D |
|
| Derivatives |
A financial instrument or contract whose value changes
according to the value of an
underlying asset, which may be financial (shares, bonds, foreign currencies, etc.)
or non-financial (commodities, agricultural foodstuffs, etc.). This change may entail
a multiplier effect (leverage). Derivatives may exist in the form of securities (warrants,
certificates, structured EMTNs, etc.) or in the form of contracts (forwards, options,
swaps, etc.). Listed derivative contracts are called futures.
|
| DFA |
The "Dodd-Frank Wall Street Reform and Consumer Protection
Act", usually referred
to as the "Dodd-Frank Act", is the US financial regulation law adopted in July 2010
in response to the financial crisis. The text is wide-ranging and covers many topics:
the creation of a Financial Stability Oversight Council, treatment of institutions
of systemic importance, regulation of high-risk financial activities, limits on derivatives
markets, improved monitoring of ratings agency practices, etc. The US regulators (Securities
and Exchange Commission, Commodity Futures Trading Commission, etc.) are currently
working on precise technical rules on these different areas.
|
| Dilution |
A transaction is described as "dilutive" when it reduces
the portion of net asset
value (e.g. net book value per share) or earnings (e.g. earnings per share) attributable
to each share in the company.
|
| Dividend |
Portion of net income or reserves paid out to shareholders.
The Board of Directors
proposes the dividend to be voted on by shareholders at the Annual General Meeting,
after the financial statements for the year ended have been approved.
|
| DOJ |
US Department of Justice. |
| Doubtful loan |
Loan on which the borrower has fallen behind with the
contractually agreed interest
payments or capital repayments, or for which there is a reasonable doubt that this
could occur.
|
| DVA |
The Debit Valuation Adjustment (DVA) is mirror opposite
of the CVA and represents
expected losses from the counterparty point of view on the liability of the financial
instruments. It reflects the credit quality effect of the entity itself on the value
of these instruments.
|
| E |
|
| EAD |
Exposure at Default: exposure of the Group in the event
of counterparty default. The
EAD includes exposures both on and off the balance sheet. Off-balance sheet exposures
are converted into the balance sheet equivalent using internal or regulatory conversion
factors (refinancing hypothesis).
|
| EBA |
European Banking Authority (EBA). The European Banking
Authority was established on
24 November 2010, by a European regulation. In place since 1 January 2011 and based
in London, it replaces the Committee of European Banking Supervisors (CEBS). This
new authority has wide-ranging powers. It is responsible for harmonising regulations,
ensuring coordination between national supervisory authorities and acting as mediator.
The objective is to implement supervision at the European level without questioning
the powers of national authorities for the day-to-day supervision of credit institutions.
|
| ECB |
European Central Bank. |
| EDTF |
Enhanced Disclosure Task Force. |
| EL |
Expected Loss is the likely loss given the quality of
the transaction and of all the
measures taken to mitigate the risk, such as collateral. It is obtained by multiplying
the exposure at default (EAD) by the probability of default (PD) and by the loss given
default (LGD).
|
| EMEA |
Europe, Middle East and Africa. |
| ESG |
Environmental, social and governance. |
| EURIBOR |
Euro Interbank Offered Rate: reference rate of the eurozone. |
| F |
|
| Fair value |
Amount for which an asset could be exchanged or for which
a liability could be settled
between well-informed, consenting parties acting under normal market conditions.
|
| FED |
Federal Reserve System/Federal Reserve/Central Banks
of the United States. |
| Finance, Technology (FinTech) |
A FinTech is a non-banking company which uses information
and communication technologies
to deliver financial services.
|
| Fides, Respect, Demeter (FReD) |
Initiative to implement, manage and measure the progress
made by the Corporate Social
Responsibility (CSR) programme. FReD has three pillars with 19 commitments that aim
to bolster trust (Fides), grow individuals and the corporate ecosystem (Respect) and
protect the environment (Demeter). Every year since 2011, the FReD index has provided
a measure of the progress made by the CSR programme being pursued by Crédit Agricole
S.A. and its subsidiaries. PricewaterhouseCoopers conducts an annual audit of this
index.
|
| FSB |
The aim of the Financial Stability Board (FSB) is to
identify weaknesses in the global
financial system and implement regulatory and supervision principles to ensure financial
stability. It consists of governors, finance ministers and supervisory authorities
of the G20 countries. Its primary objective is thus to coordinate the work of national
financial authorities and international standards bodies at the international level
to regulate and supervise financial institutions. Created at the G20 meeting in London
in April 2009, the FSB is the successor of the Financial Stability Forum established
in 1999 on G7's initiative.
|
| G |
|
| GAAP |
Generally Accepted Accounting Principles. |
| Goodwill |
Amount by which the acquisition cost of a business exceeds
the value of the net assets
revalued at the time of acquisition. Every year, goodwill has to be tested for impairment,
and any reduction in its value is recognised in the income statement.
|
| Gross exposure |
Exposure before taking into account provisions, adjustments
and risk reduction techniques. |
| Gross Operating Income (GOI) |
Calculated as revenues less operating expenses (general
operating expenses, such as
employee expenses and other administrative expenses, depreciation and amortisation).
|
| Green Bonds |
Bonds issued by an approved entity (business, local authority
or international organisation)
to finance an eco-friendly and/or sustainability-driven project or activity. These
instruments are often used in connection with the financing of sustainable agriculture,
the protection of ecosystems, renewable energy and organic farming.
|
| H |
|
| Haircut |
Percentage deducted from the market value of securities
to reflect their value in
a stress environment (counterparty risk or market stress risk). The size of the haircut
reflects the perceived risk.
|
| HQE |
Haute Qualité Environnementale (high environmental quality). |
| High Quality Liquid Assets (HQLA) |
Unencumbered high-quality liquid assets (see Asset encumbrance)
that can be converted
easily and immediately in private markets into cash in the event of a liquidity crisis.
|
| I |
|
| IAS |
International Accounting Standards. |
| IASB |
International Accounting Standards Board. |
| ICAAP |
Internal Capital Adequacy Assessment Process: process
reviewed in Pillar II of the
Basel agreement, via which the Group checks whether its capital is sufficient in light
of all risks incurred.
|
| IFRS |
International Financial Reporting Standards. |
| Impaired loan |
Loan which has been provisioned due to a risk of non-repayment. |
| Impairment |
Accounting of a reduction in the value of an asset. |
| Institutional investors |
Businesses, public-sector bodies and insurance companies
involved in securities investment,
for example, investing in the shares of listed companies. Pension funds and asset
management and insurance companies come under this heading.
|
| Investment grade |
Long-term rating provided by an external agency and applicable
to a counterparty or
an underlying issue, ranging from AAA/Aaa to BBB-/Baa3. Instruments with ratings of
BB+/Ba1 and below are considered as Non-Investment Grade.
|
| IRB |
Internal Rating-Based: approach based on the ratings
used to measure credit risk,
as defined by European regulations.
|
| IRBA |
Internal Rating Based Approach. |
| IRC |
Incremental Risk Charge: capital charge required in consideration
of rating change
risk and the risk of issuer default over one year for debt instruments in the trading
portfolio (bonds and CDS). The IRC is a value at risk of 99.9% i.e. the highest risk
obtained after eliminating 0.1% of the most unfavourable occurrences.
|
| ISP |
Investment service providers. |
| Issuer spread |
Actuarial margin representing the difference between
the actuarial rate of return
at which the Group can borrow and that of a risk-free loan of identical duration.
|
| L |
|
| LBO |
Leveraged Buy out. |
| LCR |
Liquidity Coverage Ratio: this ratio aims to promote
the short-term resilience of
a bank's liquidity risk profile. The LCR requires banks to hold an inventory of risk-free
assets that can be easily traded on the markets, to pay outgoing flows net of incoming
flows for thirty crisis days, without support from the central banks.
|
| Leverage ratio |
Simple ratio which aims to limit the size of an institution's
balance sheet. To do
this, the leverage ratio brings together Tier 1 regulatory equity and balance-sheet/off-balance-sheet
amounts, after the restatement of some items.
|
| LGD |
Loss Given Default: ratio between the loss incurred on
an exposure in the event of
counterparty default and the amount of the exposure at the time of default.
|
| LIBOR |
London Interbank Offered Rate. |
| Liquidity |
For a bank, this means its ability to meet its short-term
liabilities. When applied
to an asset, this term refers to the possibility of buying or selling it quickly on
a market with a limited reduction in value (haircut).
|
| M |
|
| Market risk |
Risk of loss of value of financial instruments arising
from changes to market parameters,
the volatility of these parameters and the correlations between these parameters.
These parameters include exchange rates, interest rates, the prices of securities
(shares, bonds) and commodities, derivative products and all other assets, such as
property assets.
|
| Market stress tests |
To evaluate market risks, parallel to the internal VaR
and SVaR model, the Group calculates
a measurement of its risks using market stress tests, to take account of exceptional
market disruption, using 26 historical scenarios, and 8 theoretical scenarios.
|
| Mark-to-Market |
Method which involves measuring a financial instrument
at fair value based on its
market price.
|
| Mark-to-Model |
Method which involves, in the absence of market prices,
measuring a financial instrument
at fair value using a financial model based on observable or non-observable data.
|
| Mezzanine |
Hybrid financing between equity and debt. In terms of
ranking, mezzanine debt is subordinate
to senior debt, but remains senior to common shares.
|
| MiFID |
Markets in Financial instruments directive. |
| Monoline |
Insurance company participating in a credit enhancement
operation, and which provides
its guarantee by issuing debt securities (e.g.: securitisation transactions), to improve
the rating of the issue.
|
| MTP |
Medium-term plan. |
| N |
|
| Net Banking Income (NBI) or revenues |
Difference between banking income (interest income, fee
income, capital gains from
market activities and other income from banking operations) and banking expenses (interest
paid by the bank on its funding sources, fee expenses, capital losses arising on market
activities and other expenses incurred by banking operations).
|
| Net book value (NVB) (1) |
The net book value corresponds to the shareholders' equity
share of the group from
which the amount of the AT1 issues, the gains or losses in other comprehensive income
and the draft dividend on annual results have been restated.
|
| Net income Group share (NIGS) |
Net income/(loss) for the financial year (after corporate
income tax). Equal to net
income less the share attributable to non-controlling interests in fully consolidated
subsidiaries.
|
| Net Income Group share underlying (1) |
The underlying net income Group share represents the
stated net income Group share
from which specific items have been deducted (i.e. non-recurring or exceptional items).
|
| NSFR |
Net Stable Funding Ratio: this ratio is intended to encourage
longer-term resilience
by introducing additional incentives for banks to finance their operations from sources
with a greater structural stability. This structural ratio for long-term liquidity
over a period of one year is designed to give a viable structure to maturing assets
and liabilities.
|
| O |
|
| OFAC |
Office of Foreign Assets Control. |
| Offsetting agreement |
An agreement under which two parties to a financial contract
(forward financial instrument),
a securities loan or repurchase agreement, agree to offset their mutual loans and
receivables pursuant to these contracts; the settlement of these only relates to a
net offset balance, particularly in the event of default or termination. An overall
offsetting agreement extends this mechanism to different families of transactions,
which are governed by different framework agreements by way of a master agreement.
|
| Operating income |
Calculated as gross operating income less the cost of
risk. |
| Operational risk (including accounting and environmental
risk) |
Risk of losses or penalties as a result of failures in
internal procedures and systems,
human error or external events.
|
| OTC |
Over-The-Counter. |
| P |
|
| Pricing |
Setting a price. |
| R |
|
| Rating |
Evaluation, by a financial ratings agency (Moody's, FitchRatings,
Standard & Poor's),
of the financial insolvency risk of an issuer (company, government or other state
authority) or of a given transaction (bond issue, securitisation, covered bonds).
The rating has a direct impact on the cost of raising funds.
|
| Rating agency |
A body which specialises in assessing the solvency of
debt security issuers, i.e.
their ability to honour their commitments (repay capital and interest within the contractual
period).
|
| Ratio Core Tier 1 |
Ratio between Core Tier 1 capital and risk-weighted assets
according to the Basel
II rules and their development referred to as Basel 2.5.
|
| Resecuritisation |
Securitisation of an exposure which has already been
securitised where the risk associated
with the underlying exposures has been divided into tranches and for which at least
one of the underlying exposures is a securitised exposure.
|
| Resolution |
Shortened form of "resolution of crises and bank failures".
In practice, two types
of plan need to be drawn up for every European bank: 1) a preventative recovery plan
prepared by the bank's senior managers, and 2) a preventative resolution plan put
in place by the competent supervisory authority. Resolution occurs before bankruptcy
of the bank, to plan its ordered dismantling and avoid systemic risk.
|
| Risk Appetite |
Level of risk that the Group is willing to assume in
pursuit of its strategic objectives.
It is determined by type of risk and by business line. It may be stated using either
quantitative or qualitative criteria. Establishing the risk appetite is one of the
strategic management tools available to the Group's governing bodies.
|
| RMBS |
Residential Mortgage Backed Securities: debt securities
backed by an asset portfolio
made up of residential mortgage loans.
|
| RWA |
Risk Weighted Assets: Assets and risk commitments (loans,
etc.) held by a bank weighted
by a prudential factor and based on the risk of loss and used, when added together,
as the denominator for major solvency ratios.
|
| S |
|
| SEC |
US Securities and Exchange Commission (authority which
controls the US financial markets). |
| Securitisation |
Transfer of a credit risk (loan debts) to a body which
issues, for this purpose, marketable
securities subscribed by investors. This transaction may result in a transfer of loans
and receivables (physical securitisation) or the transfer of the risks only (credit
derivatives). Securitisation transactions can result in a subordination of securities
(tranches).
|
| SFEF |
Société de Financement de l'Économie Française (French
Financing Agency). |
| SFS |
Specialised financial services. |
| SIFIs |
Systemically Important Financial Institutions: the Financial
Stability Board (FSB)
coordinates all measures to reduce the moral hazards and risks of the global financial
system posed by systemically important institutions (G-SIFI or Globally Systemically
Important Financial Institutions or even GSIB - Global Systemically Important Banks).
These institutions meet the criteria set out in the Basel Committee rules outlined
in the document named "Global Systemically Important Banks: Assessment methodology
and the additional loss absorbency requirement" and are identified in a list published
in November 2011. This list is updated by the FSB every November. Institutions classified
as GSIB will gradually have to apply increasing limits on the level of their share
capital.
|
| SMEs |
Small and medium-sized enterprise. |
| Socially Responsible Investment (SRI) |
Systematic and clearly documented incorporation of environmental,
social and governance
criteria in investment decisions.
|
| Société d'investissement à capital variable (SICAV) -
open-ended investment company |
A type of UCITS which enables investors to invest in
a portfolio of financial assets
without holding them directly and to diversify their investments. It manages a portfolio
of stocks or other assets and may specialise in a specific market, an asset class,
an investment profile, or a specific sector. From a tax perspective, a SICAV unit
is like a share.
|
| Solvency |
Measures the ability of a business or an individual to
repay its debt over the medium
to long term. For a bank, solvency reflects its ability to cope with the losses that
its risk profile is likely to trigger. Solvency analysis is not the same as liquidity
analysis. The liquidity of a business is its ability to honour its payments in the
normal course of its business, to find new funding sources and to achieve a balance
at all times between its incomings and outgoings. For banks, solvency is governed
by the CRD 4 Directive and CRR Regulation.
|
| Spread |
Actuarial margin (difference between the actuarial rate
of return of a bond and that
of a risk-free loan of identical duration).
|
| Stress tests |
Exercise to study the ramifications on banks' balance
sheets, profit and loss and
solvency in order to measure their ability to withstand these kinds of situations.
|
| Structural interest rate and foreign exchange risks |
Risk of losses or impairment on the Group's assets in
the event of fluctuations in
interest and exchange rates. Structural interest rate and foreign exchange risks are
linked to commercial activity and own management operations.
|
| Structured issue or structured product |
Financial instrument combining a debt product and an
instrument (such as an option)
enabling exposure on all kinds of asset (shares, foreign currencies, rates, commodities).
Instruments may include total or partial guarantee, of the capital invested. The term
"structured product" or "structured issue" also refers to securities resulting from
securitisation transactions, for which a ranking of bearers is organised.
|
| Subordinated notes |
Issues made by a company, the returns on and/or redemption
of which are contingent
upon an event (conditional upon payment of a dividend or achievement of an outcome).
|
| SVaR |
Stressed Value at Risk: identical to the VaR, the calculation
method entails a "historical
simulation" with "1-day" shocks and a 99% confidence interval. Unlike the VaR, which
uses the 260 daily change scenarios over a rolling one-year period, Stressed VaR uses
a historical one-year window corresponding to a period of significant financial stress.
|
| Swap |
Agreement between two counterparties to exchange one's
assets or income from an asset
for those of the other party's up to a given date.
|
| T |
|
| Tier 1 Equity |
Made up of Common Equity Tier 1 capital and Additional
Tier 1 capital. The latter
correspond to perpetual debt instruments without any redemption incentives, less regulatory
deductions.
|
| Tier 1 ratio |
Ratio between Tier 1 capital and risk-weighted assets. |
| Tier 2 Equity |
Additional capital mainly comprising subordinated securities
less regulatory deductions. |
| Total capital ratio or solvency ratio |
Ratio between total capital (Tier 1 and Tier 2) and risk-weighted
assets. |
| Total Loss Absorbing Capacity (TLAC) |
Designed at the G20's request by the Financial Stability
Board. It aims to provide
an indication of the loss-absorbing capacity and of the ability to raise additional
capital of the systemically important banks (G-SIBs).
|
| Transformation risk |
This risk exists when assets are financed using resources
with differing maturities.
As a result of their traditional business of transforming resources with short maturities
into longer term uses, banks are naturally affected by transformation risk, which
itself entails liquidity risk and interest rate risk. Transformation is when assets
have a longer maturity than liabilities and anti-transformation is when assets are
financed by resources with a longer maturity.
|
| Treasury shares |
Portion owned by a company in its own share capital.
Treasury shares have no voting
rights attached and are not used to calculate profit per share.
|
| TSDI (Titres subordonnés à durée indéteminée - Undated
subordinated notes) |
Undated subordinated notes have no specified maturity
date, with redemption being
at the behest of the issuer beyond a certain date.
|
| TSS (Titres super-subordonnés - Deeply subordinated notes) |
Undated subordinated issue giving rise to perpetual returns.
Their perpetual maturity
arises from the fact that they do not have a contractual redemption date, with redemption
taking place at the option of the issuer. Should the issuer be liquidated, these notes
are redeemed after all the other creditors have been repaid.
|
| U |
|
| Undertakings for collective investment in transferable
securities (UCITS) |
An UCITS is a portfolio of negotiable securities (equities,
bonds, etc.) managed by
professionals (management companies) and held collectively by retail or institutional
investors. There are two types of UCITS - SICAVs (open-ended investment companies)
and FCPs (mutual investment funds).
|
| V |
|
| VaR |
Value at Risk: Synthetic indicator used to track on a
day-to-day basis the market
risks taken by the Group, particularly in its trading activities (VaR is calculated
using a 99% on 10 days-confidence interval, over one day, in line with the regulatory
internal model). Reflects the largest exposure obtained after eliminating 1% of the
most unfavourable occurrences over a 1-year history.
|
| Volatility |
Volatility measures the scope of the fluctuations of
the price of an asset and thus
its risk. It corresponds to the standard deviation of the instantaneous profitability
of the asset over a certain period.
|
| VSB |
Very small businesses. |
(1):
APM indicator.
CRÉDIT AGRICOLE CORPORATE & INVESTMENT BANK
12, place des Etats-Unis - CS 70052
92547 MONTROUGE CEDEX - France
Tél. : +33 (0)1 41 89 00 00
www.ca-cib.com
This registration document is available on the Crédit Agricole website (www.ca-cib.com)
and on the Autorite des Marches Financiers website in a French version (www.amf-france.org).
|